THE  TRUST.-  ITS  BOOK 


LIBRARY 
University  of  Californl 

IRVINg. 


5 


The  Trust:  Its  Book 


The 

Trust:  Its  Book 

BEING    A    PRESENTATION    OF    THE    SEVERAL   ASPECTS 
OF    THE    LATEST    FORM    OF    INDUSTRIAL    EVOLUTION 

By 

CHARLES    R.   FLINT,    JAMES    J.    HILL, 

JAMES  H.  BRIDGE,  S.  C.  T.  DODD, 

AND  FRANCIS  B.  THURBER 

WITH   NUMEROUS  EXPRESSIONS  OF  REPRE- 
SENTATIVE OPINION  AND  A  BIBLIOGRAPHY 

jp 

Edited  by  JAMES  H?  BRIDGE 


NEW   YORK 

DOUBLEDAY,   PAGE  &  COMPANY 
1902 


Copyright,   igoi,  by 

Doubleday,  Page  &  Co. 

Published,  May,  IQOI 


ACKNOWLEDGMENTS 

The  Editor's  thanks  are  due  and  hereby  tendered  to 
the  publisher  of  The  North  American  Review  for  permis- 
sion to  republish  Chapters  IV,  VI  and  VII,  which  first 
appeared  in  that  magazine;  and  als«  to  Mr.  Dodd  for  his 
contribution  of  the  second  chapter,  which  originally 
formed  the  substance  of  an  address  to  the  students  of  the 
Syracuse  University.  Mr.  Flint's  essays  are  based  on 
addresses  and  speeches  delivered  at  the  Providence  Com- 
mercial Club,  April  29th,  1892,  at  a  complimentary  din- 
ner given  to  him  by  W.  M.  Wood,  Esq.,  at  Boston,  May 
25th,  1899,  and  at  the  annual  dinner  of  the  Illinois  Man- 
ufacturers' Association,  October  gth,  1900 


CONTENTS 


INTRODUCTION. 

AMERICA'S  COMMERCIAL  PRIMACY  AND 
THE  TRUST 

James  H.  Bridge 

America's  commercial  expansion  just  begun — Our 
rapid  growth  in  population  and  productive  power 
— Some  compansons — Effects  of  good  feeding — 
Surprising  growth  of  wealth :  its  general  benefits — 
America's  commercial  independence  —  Superior 
systems  of  transportation — Underlying  causes — 
The  law  of  evolution  applied — Industrial  central- 
ization a  natural  process;  its  inevitableness — 
Probable  lines  of  future  development  —  Insuffi- 
ciency of  law  of  competition — Struggle  for  exist- 
ence not  Nature's  last  word;  universal  co-operation 
its  logical  successor  —  Evils  of  transition  from 
lower  to  higher  industrial  life;  their  passing  char- 
acter— Political  effects  of  American  primacy  on 
Europe — Higher  import  of  our  commercial  con- 
quest   xiii 


CHAPTER  I. 
COMBINATIONS  AND  CRITICS 

Charles  R.  Flint 

Combination,  a  natural  evolution;  its  use  and  abuse — 
Webster's  broad  views  contrasted  with  the  reaction- 
ary opinion  of  a  French  philosopher — Macaulay's 
description  of  early  English  opposition  to  improved 
stage-coach  transportation — Combination  neces- 
sary to  self-preservation — Aggregation  of  intellect 
accompanies  combination  of  capital — General  bene- 

vii 


viii  THE  TRUST:    ITS  BOOK 

fits  of  machinery;  far-reaching  effects  illus- 
trated: diminution  of  crime — Injudicious  legislation 
deplored — Competition  not  always  beneficial — 
Alexander  Hamilton  on  manufactures — Some  al- 
leged disadvantages  of  combination  discussed:  mo- 
nopolies: appeal  to  experience;  higher  prices:  illus- 
tration from  Manhattan  Railway — Cleveland  on 
protection  of  invested  capital — Alleged  cheapen- 
ing of  quality  considered — Public  benefits  of  rail- 
way consolidations — Effects  of  tariff  in  creating  de- 
structive competition — Benefits  of  competition 
exaggerated;  illustrations  from  England — New 
industries  inevitably  injure  those  they  displace; 
result  incidental,  not  intentional — Legislation 
originally  directed  against  unions  of  workers — Sur- 
vival of  fittest  applied  to  industrialism;  effect  event- 
ually good — To  prohibit  combination  is  to  protect 
the  unskilled — Futility  of  laws  to  suppress  intelli- 
gence— Individuality  not  destroyed  by  combina- 
tion— Elevating  influence  of  specialization — Ag- 
gregated capital  not  yet  a  menace;  impolitic  to  seek 
to  limit  it;  opinion  of  Daniel  Webster — Uses  of  the 
demagogue — Institutions  not  to  be  judged  by  short- 
comings alone;  illustrations  from  marriage,  religion 
and  politics — Political  unity  effected  by  industry — 
Consolidations  discredited  by  legal  defects:  new 
laws  for  new  conditions — English  wisdom  in  re- 
pealing restrictive  measures;  other  legislatures 
following — Freer  trade  logical  outcome  of  present 
evolution:  example  from  oil  trade — Industrial 
ideals  possible  under  combination  . 


CHAPTER  II. 

AGGREGATED  CAPITAL:    ITS  HISTORY  AND 
INFLUENCE 

S.  C.  T.  Dodd 

Aggregated  capital  unknown  to  ancients;  trade  con- 
sidered ignoble — Similar  conceptions  in  England; 
recent  changes — Idyls  of  Merrie  England  only  im- 
aginary; real  state  described — Factors  of  modern 
progress — The  Hanseatic  League  a  trust;  its  civiliz- 
ing effects — State  of  England  in  the  Sixteenth  Cen- 
tury— Capital  as  a  vitalizing  force — Revolutions 
effective  by  factory  system  and  steam  transporta- 


CONTENTS  ix 

tion — The  glory  of  work — Natural  law  in  industrial- 
ism— How  capital  through  manufactures  has  bene- 
fited mankind — ^Contrasts  between  ancient  and 
modern  methods  in  milling,  spinning,  iron  making, 
transportation — Machinery  displaces  labour;  re- 
sulting hardships  only  temporary;  final  outcome 
increased  demand  for  labour,  at  better  wages,  short- 
er hours,  and  added  domestic  comfort — Large  pro- 
duct of  mechanical  aids  to  labour — Rewards  of 
labour  ever  increasing — Concentration  a  natural 
law — Condition  of  foreign  working  classes  con- 
trasted— Isolated  communities  at  home — Evils  of 
historic  monopolies;  their  failure  was  inevitable — 
Injurious  effects  of  governmental  control  of  indus- 
tries— Aggregated  capital  not  to  blame  for  results 
of  unwise  legislation;  examples — Impotency  of 
regulations  against  natural  developments — Eng- 
land's prospenty  due  to  relaxation  of  artificial  re- 
straints— American  colonial  history  reviewed — 
Right  of  association  early  recognized  in  U.  S.;  re- 
cent tendency  to  revert  to  ancestral  errors — Con- 
centration and  competition;  effects  on  prices,  on 
individuality,  on  wages — Vast  aggregations  of  capi- 
tal in  railways;  their  results  in  cheapening  products; 
examples — Aggregated  capital  in  the  oil  trade; 
benefits — Employee  as  shareholders — Limitations 
of  aggregated  capital:  cannot  work  miracles — 
Errors  of  doctrinaires;  poverty  not  itself  a  virtue, 
riches  no  crime — Poverty  and  defective  work;  effi- 
ciency and  its  natural  rewards — "Sweating";  its 
evils  and  remedy — Socialism  and  communism  no 
cure  for  poverty  and  suffering — Creators  of  wealth 
not  reprehensible ;  large  fortunes  a  public  benefit — 
Inequalities  natural  and  unpreventable — All  good 
things  accompanied  by  some  evil — Industrial  lib- 
erty the  lesson  of  history 39 

CHAPTER  III. 

THE  GOSPEL  OF  INDUSTRIAL  STEADINESS 
Charles  R.  Flint 

Right  of  capital  to  combine  now  conceded — How  to 
minimize  mistakes — During  present  prosperity 
liberal  allowances  for  depreciation  should^be  made; 
surpluses  should  be  increased — New  capitalization 
should  not  be  based  on  abnormal  earnings:  illustra- 


THE  TRUST:    ITS  BOOK 

tion  from  West  Shore  Railroad  —  Reaction  cer- 
tain —  Gospel  of  steadiness  preached  —  Tempta- 
tions to  over-speculation — In  consolidations  good 
will  and  individuality  of  constituent  companies 
should  be  preserved,  best  managers  retained — 
Some  disadvantages;  how  to  offset  them — Compe- 
tition among  department  managers  to  be  encour- 
aged— Lessons  furnished  by  England — Advanta- 
ages  of  large  aggregations  of  capital  and  ability; 
contrasted  with  past  demoralization — Results  of 
combinations  on  our  exports — "Trade  follows  the 
price;"  the  flag  follows  the  trade — Industrial  wars 
demand  trained  combatants — Industrials'  shares 
as  investments — Workman  now  an  overseer  of  ma- 
chines; receives  the  wages  of  intelligence — The  so- 
called  "Trust  Issue'  in  politics — Humanity's 
emancipation  proclamations  written  by  great  in- 
ventors .  8 1 


CHAPTER  IV. 

COMBINATIONS    AND    THE    PUBLIC 
James  J.  Hill 

Combinations  and  public  hostility;  due  to  misconcep- 
tions— Old  trusts  and  new  combinations;  dif- 
erences;  former  illegal — Wasteful  methods  con- 
trasted— Combinations  bring  higher  wages,  lower 
executive  expenses;  increased  efficiency  of  plants 
and  values — -Injuries  incidental  and  limited;  bene- 
fits general — To  workmen,  diminished  risk  of  la- 
bour conflicts;  superior  mechanical  aids;  freedom 
to  invest  and  share  profits — To  consumers,  lower 
prices — Permanence  dependent  on  good  results — 
Called  forth  by  changed  industrial  conditions — 
Benefits  in  railroading:  reduced  cost  of  operation; 
limitation  of  destructive  competition — Financial 
interest  of  public  in  stable  conditions  .  .  -95 

CHAPTER  V. 

THE  TRUST:    AN  ALLIANCE  OF  WORK,  BRAINS 
AND   MONEY 

Charles  R.  Flint 

Combinations  as  distinguished  from  trusts;  latter,  as 
originally  formed,  full  of  imperfections  and  objec- 


CONTENTS  xi 

tionable   features — The  name,  however,  should  be 

E reserved — Opposition  to  industrial  development; 
istory  again  repeating  itself — Grant's  amusing 
speech — Sound  judgment  not  disturbed  by  clamour 
— Economies  of  civilization — Our  prosperity;  the 
equitable  division  of  its  advantages  between  capi- 
tal, superintendence  and  labour — The  question  of 
dividends  versus  interest — Higher  standard  of  in- 
telligence demanded  by  centralization;  its  propor- 
tionate reward — Mr.  Schwab  as  a  type — Interde- 
pendence a  trait  of  civilization — Tilden  a  monopol- 
ist of  intellect — -Present  tendency  to  minimum  of 
profits,  of  maximum  of  wage;  as  results  from  high 
industrial  development — Wealth  of  the  wage-earn- 
ers— All  interests  benefited  by  combination  in  man- 
ufacture— The  same  is  noted  in  distribution — In- 
dustrials more  conservatively  capitalized  than 
railroads;  exceptions  that  call  for  legislative  cor- 
rection— Wealth  as  a  trust;  its  proper  uses  facili- 
tated and  fostered  by  consolidations — Industrial 
leaders  and  their  great  work — Decentralization  of 
ownership  progressing — Good  effects  of  majority 
rule — Confidence  the  foundation  of  business  activ- 
ity— Political  agitation;  injurious  effects  on  trade — 
Need  for  conservatism  in  laws — Our  trade  balance 
as  a  strength-giving  factor — Relation  of  wages  to 
exports;  illustration  from  China — A  hint  at  our 
future  destiny  .  .  .  .  .  .  .  in 


CHAPTER  VI. 

INFLUENCE  OF  THE  TRUST  ON  PRICES 
Francis  B.  Thurber 

"A  trust  of  trusts"  and  the  fear  of  unreasonable 
prices:  how  far  justified — Railway  consolidations 
have  induced  lower  rates  and  improved  service — 
Standard  Oil  Company  and  prices — The  Sugar 
Trust:  effect  of  tariff  changes  on  prices;  effect  of 
competition;  of  increased  production;  of  improved 
methods — High  commercial  death-rate  before  for- 
mation of  trust — Effects  of  unreasonable  competi- 
tion— Prices  of  paper  unaffected  by  tariff  or  trusts 
— The  Steel  Trust:  forecast  of  trend  of  prices;  com- 
parison of*.English  and  American  prices — Prices  of 
other  staples:  wool,  coffee,  cotton — Frequent  fluctu- 


xii  THE  TRUST:    ITS  BOOK 

ations  results  of  power  and  machinery — Relative 
productive  power  of  hand  and  machine  labour — 
Some  striking  illustrations — Great  increase  of  pro- 
ductive power  in  the  U.  S. — Probable  effect  on  the 
world,  and  on  ourselves — Antidote  to  alarmists — 
Suggestions  for  legislation — Carnegie's  kaleido- 
scopic conception  .  ...  135 

CHAPTER  VII. 

WHAT  COMBINATION   HAS   DONE  FOR  CAPITAL 
AND  LABOUR 

Charles  R.  Flint 

Launching  a  fallacy,  its  ease;  effects — Misconceptions 
concerning  industrial  capitalizations — Some  facts 
on  values  and  investments — Early  mistakes  of  rail- 
road incorporators;  their  lesson  learnt — A  compari- 
son of  investment  values;  industrials  show  better 
than  railways — Consolidations  mean  distribution 
of  ownership ;  therefore  tend  to  political  stability — 
Large  capitalizations  and  real  values;  example  of 
Steel  Trust — Extent  of  credit  system;  its  superior- 
ity over  old  methods — Popular  opposition  to  pro- 
gress illustrated  afresh — Advantages  of  combina- 
tion reviewed;  influence  on  our  commercial  suprem- 
acy   151 


APPENDIX 

I.     THE     TRUST     AND     REPRESENTATIVE 

OPINION !69 

II.     THE  TRUST  IN  OPERATION      .         .         .207 

III.     A     LIST     OF      BOOKS      RELATING      TO 

TRUSTS 227 


INTRODUCTION 

AMERICA'S       COMMERCIAL      PRIMACY 
AND    THE    TRUST 

JAMES  H.  BRIDGE 

THE  industrial  supremacy  of  the  United 
States  is  the  most  recent  and  conspicuous  fact 
of  the  age.  The  suddenness  with  which  the 
Republic  has  seized  upon  the  leadership  of 
the  world  has  left  the  old  nations  bewildered 
and  afraid.  Their  alarm  is  justified.  Her 
surprising  progress  in  manufactures  and  min- 
ing, her  great  accumulation  of  wealth,  her 
rapid  development  of  the  resources  of  her 
magnificent  territory,  her  energetic  utilization 
of  the  forces  of  nature,  which  have  character- 
ized the  later  years  of  her  national  life,  but 
seem  as  the  tentative  efforts  of  a  youth  testing 
his  newly-attained  manhood.  The  century 
just  past  marked  the  growth  of  the  nation  to 
adolescence;  the  present  one  promises  to  wit- 
ness the  perfection  of  its  maturity.  For  over 
a  hundred  years  the  American  people  have 
been  welding  themselves  together  as  a  nation. 
They  have  been  occupied  with  the  conquest 
of  this  great  continent,  and  planning  for  its 
economical  development.  The  work  is  done. 
With  youthful  vigour  and  ambition,  flushed 

xiii 


xiv  THE  TRUST:    ITS  BOOK 

with  a  century  of  success,  the  nation  is  now 
casting  about  for  fresh  fields  to  conquer,  and 
the  world  is  before  her. 

During  her  childhood,  the  nation  grew  as  a 
child.  Her  numbers  were  repeatedly  doubled 
in  twenty-five  years.  Now,  with  a  population 
double  that  of  France,  of  Great  Britain,  of 
Italy,  or  of  combined  Spain  and  Scandinavia, 
her  rate  of  growth  still  vastly  exceeds  that  of 
any  other  country.  It  has  taken  France  one 
hundred  and  fifty  years  to  double  her  popula- 
tion. Now  her  numbers  are  diminishing ;  she  is 
out  of  the  race.  England,  whose  natural  increase 
has  surpassed  that  of  any  other  European  power, 
took  seventy  years  to  double  her  numbers, 
and  even  that  rate  is  no  longer  maintained. 
In  seventy  years  America  added  to  her  num- 
bers almost  as  many  as  the  present  population 
of  France,  England  and  Scotland  combined. 
From  thirteen  millions  to  eighty  millions  is 
the  record  of  the  Republic  from  1831  to  1901. 

The  unprecedented  multiplication  of  Ameri- 
ca's population,  however,  is  but  an  imperfect 
index  of  her  growth.  While  the  people  have 
increased  five-fold  during  the  century,  their 
productive  power  has  multiplied  about  forty 
times.  Measured  in  foot  tons,  the  daily 
mechanical  energy  of  the  nation  has  advanced 
from  4,293  millions  in  1820  to  160,000  millions 
in  1902.  In  other  words  we  have,  as  a  nation, 
nearly  forty  times  as  much  power  to  work  as 
had  our  predecessors  eighty-two  years  ago; 


INTRODUCTION  xv 

and  each  unit  of  us,  babies  included,  has  2,000 
foot  tons  daily,  as  against  446  in  1820.  When 
we  remember  that  the  day's  work  of  a  healthy 
dock  labourer  represents  only  325  foot  tons, 
we  begin  to  realize  what  this  tremendous 
potential  of  the  American  baby  is.  In  Eng- 
land the  ratio  is  1470, — only  what  it  was  in  the 
United  States  twenty  years  ago.  So  that  man 
for  man,  industrially  considered,  the  American 
is  twenty  years  ahead  of  the  Englishman. 
The  difference  is  greater  when  other  nations 
are  brought  to  the  test ;  for  slow  and  conserva- 
tive as  England  is  in  comparison  with  ourselves, 
she  is  still  far  ahead  of  her  neighbours  in 
Europe.  In  Germany  the  ratio  is  only  952; 
in  France  it  is  930;  in  Spain  600;  in  Austria, 
so  belligerent  commercially,  it  is  only  575; 
and  finally  Italy  comes  with  390 !  Thus  one 
American,  aided  with  the  mechanical  appli- 
ances he  has  developed,  can  do  more  work 
than  an  Englishman  and  an  Italian  combined; 
than  two  Frenchmen;  or  two  Germans,  or 
three  Spaniards  and  Austrians,  or  than  five 
Italians,  all  similarly  equipped  in  their  own 
country.  As  we  have  reached  a  point  in  social 
evolution  when  men  and  nations  are  being 
tested  by  their  productive  rather  than  their 
destructive  power,  the  comparison  must  be 
considered  a  fair  one.  There  used  to  be  a 
time,  not  long  ago,  when  one  Englishman  was 
equal  to  half  a  dozen  Frenchmen,  or  one 
Frenchman  equal  to  an  indefinite  number  of 


xvi  THE  TRUST:    ITS  BOOK 

Englishmen,  according  to  the  respective  nation- 
ality of  the  boaster;  but  that  was  a  measure 
of  prowess  in  arms,  not  of  effectiveness  in 
foot-tons. 

If  the  total  working  power  of  the  nations 
is  compared,  the  difference  in  favour  of  Amer- 
ica is  even  more  striking.  Against  the  160,000 
millions  of  the  Republic,  England  has  about 
65,000  millions,  Germany  52,000,  and  so  on 
down  the  list  to  Italy  with  something  like 
13,000  millions. 

At  the  present  time  the  increase  in  America's 
working  power  is  so  rapid  that  the  next  ten 
years  will  see  an  addition  to  her  already- 
supreme  figures  greater  than  the  present  total 
of  England  or  of  Germany.  Every  factory 
built,  every  acre  brought  under  mechanical 
cultivation,  every  waterfall  harnessed,  every 
oil-well  discovered,  every  new  railroad,  fresh 
invention  or  patented  device,  adds  to  the  grand 
total  of  men's  power  to  work  economically 
and  efficiently;  and  as  these  results  of  human 
activity  are  multiplying  in  America  more 
rapidly  than  in  Europe,  where  millions  of 
workingmen  are  ever  under  training  to  kill 
other  workingmen,  the  differences  indicated 
above  are  to  become  more  and  more  in  Ameri- 
ca's favour.  In  1920  there  will  be  one  hun- 
dred and  ten  millions  of  Americans  with  a 
working  power  greater  than  that  of  the  whole 
of  Europe,  with  its  three  hundred  and  fifty 
millions.  It  is  neither  difficult  nor  unsafe  to 


INTRODUCTION  xvii 

prophesy  concerning  geometric  progression, 
such  as  this  is. 

To  briefly  indicate  in  one  department  of  in- 
dustry how  this  mechanical  superiority  works, 
it  can  be  shown  that,  in  agriculture,  the  pro- 
duct per  capita  of  the  hands  employed  in 
America  is  350  bushels  of  grain,  as  against  119 
in  England,  98  in  France,  75  in  Germany,  64 
in  Austria  and  39  in  Italy.  In  the  production 
of  meat  America  leads  with  1,230  pounds  per 
farm  hand,  as  against  1,090  in  England,  350  in 
France,  230  in  Germany,  the  same  in  Austria, 
and  130  in  Italy.  In  manufactures,  of  course, 
the  contrast  is  much  more  striking. 

The  greater  efficiency  of  the  American  as  a 
food-producer  bears  a  direct  relation  to  the 
continuance  of  his  superiority;  since  good 
feeding  produces  good  men, — men  of  fine  in- 
telligence as  well  as  fine  physique;  men  of  re- 
source and  energy  and  big  brains,  as  well  as 
broad  conceptions  and  high  ideals.  "God 
sifted  a  nation  to  find  seed  for  this  planting;" 
and  the  selective  process  continues.  Taking 
as  we  do,  the  most  enterprising  and  ambitious 
men  and  women  of  every  race,  giving  them 
the  opportunity  of  securing  food  in  kinds  and 
quantities  undreamed  of  in  their  old  homes, 
and  educating  their  peasant  offspring  side  by 
side  with  the  descendants  of  God's  first  sifting, 
it  is  no  wonder  that  the  second  generation  of 
Slavonic  serfs  and  runt-like  Italians  come  to 
acquire  some  outward  aspect  and  inward 
force  of  the  sons  of  Puritans. 


xviii  THE  TRUST:    ITS  BOOK 

When  the  Pilgrim  fathers  landed,  less  than 
three  hundred  years  ago,  on  the  desolate  shores 
of  Massachusetts,  their  wealth  consisted  of 
such  poor  belongings  as  they  had  been  able  to 
stow  into  a  vessel  no  bigger  than  a  sloop  yacht. 
When  they  had  built  their  first  house,  their 
wealth  was  increased  by  the  value  of  their 
labour  on  it.  At  this  period,  the  nations  of 
the  old  world  had  their  cities,  public  buildings, 
roads  and  economic  organizations,  which  had 
taken  generations  to  build  up  and  had  cost  in 
human  effort  more  than  can  now  be  estimated. 
The  American  people  are  making  such  vast 
accumulations  that  a  single  decade  now  sees 
an  addition  to  their  wealth  greater  than  the 
entire  capital  value  of  some  of  these  old  na- 
tions, who  were  so  abundantly  equipped  when 
the  founders  of  America  had  little  beyond  the 
clothes  they  wore.  It  is  marvellous  that  the 
Republic  should  ever  have  doubled  her  popu- 
lation in  twenty-five  years;  but  she  has  quad- 
rupled her  wealth  during  the  same  period. 
Within  the  memory  of  persons  living  her 
wealth  has  multiplied  sixteenfold.  In  thirty 
years,  from  1850  to  1880,  its  increase  was 
greater  than  the  entire  wealth  of  the  German 
Empire,  with  its  farms,  old-time  cities,  banks, 
shipping,  manufactures,  Krupp  guns  and  mil- 
lions of  conscripts.  Her  annual  accumulation 
during  this  period  was  over  800  million  dollars ; 
so  that  each  decade  added  more  to  her  wealth 
than  the  capital  value  of  Italy  or  Spain.  This 


INTRODUCTION  xlx 

is  sufficiently  startling,  but  it  is  nothing  to 
what  has  been  done  since.  America's  present 
rate  of  accumulation  reaches  figures  absolutely 
incomprehensible.  Let  us  put  it  into  thou- 
sands of  millions,  simply  for  comparison;  for 
we  cannot  possibly  grasp  the  meaning  of  such 
totals.  In  1850  it  was  between  7  and  8. 
Twenty  years  later  it  was  over  30.  Ten  years 
later  it  was  over  42.  In  1890  it  was  65,  and 
in  1900  it  was  94.  This  simple  statement  is 
comprehensible  provided  we  forget  that  each 
one  of  the  units  represents  a  thousand  million 
dollars !  To  present  the  fact  in  another  form, 
let  us  say  that  the  present  wealth  of  the  United 
States,  if  divided,  would  give  $1,235  to  every 
individual,  including  babies,  or  about  $5,000 
to  every  family  in  the  land.  This  is  four  times 
as  much  per  head  as  in  1850,  when  it  was  only 
$307.  The  increase  in  general  comfort  and 
well-being  which  these  figures  imply  is  not 
capable  of  statistical  expression ;  but  it  can  be 
seen  in  the  comfortable  homes  of  the  people, 
in  the  well-stocked  markets  where  they  buy 
their  food,  in  the  shops  where  they  get  their 
clothes,  in  the  schools  where  their  children  are 
educated  by  methods  undreamt  of  a  generation 
ago.  It  can  be  seen  in  the  superior  stature  of 
the  people,  indicating  better  sanitation  and 
more  generous  feeding  during  childhood.  It 
is  visible  in  the  general  use  of  books,  in  the 
great  intelligence  of  the  people  and  in  the 
general  air  of  prosperity  seen  even  among  the 


xx  THE  TRUST:    ITS  BOOK 

humblest  workers.  That  these  workers  have 
a  large  share  in  the  general  prosperity  of  the 
country  is  shown,  in  one  way,  by  the  fact  that 
nearly  three  per  cent,  of  the  total  wealth  of 
the  country  is  in  savings  banks.  The  exact 
sum  in  1900  was  $2,624,873,634 — an  increase 
of  nearly  five  hundred  per  cent,  in  thirty  years. 
In  England  the  increase  of  similar  deposits 
during  the  same  period  was  three  hundred  per 
cent. 

The  surprising  growth  of  America's  working 
power  and  wealth,  familiar  perhaps  to  the  stu- 
dent of  economics,  are  not  generally  known  either 
at  home  or  abroad.  They  have  been  ob- 
scured by  the  phenomenal  progress  of  American 
manufactures,  and  the  recent  successful  in- 
vasion by  American  manufacturers  of  the 
markets  of  the  world.  They  are,  however,  the 
underlying  causes  of  that  amazing  exhibition 
which  has  given  a  shock  to  the  oldest  and  most 
cherished  traditions  of  Europe  and  which  has 
long  been  foreseen  in  America.  In  1900  Amer- 
ica's exports  of  domestic  manufactures  exceeded 
$433,000,000  in  value.  In  1886,  when  they 
amounted  to  less  than  one-third  of  this  sum, 
I  predicted,  in  a  little  book  which  had  some 
circulation  in  England,  the  coming  invasion, 
and  asked :  What  will  Europe  give  in  exchange 
for  American  products  "when  the  Republic  not 
only  becomes  self-sufficing,  but  sends  her  cheap 
manufactures  into  the  neutral  markets  of  the 
world?  Already  her  exports  are  31  per  cent. 


INTRODUCTION  xxi 

in  excess  of  imports.  This  problem  will  get 
more  difficult  of  solution  as  it  grows  old. 
America,  favoured  by  great  natural  resources, 
and  untrammelled  by  military  taxation  or  ser- 
vice, free  from  war  debts  and  from  the  burden 
of  royalty  and  large  classes  of  non-producers, 
will  soon  undersell  the  products  of  Europe  in 
every  market.  This  is  the  way  in  which  the 
Western  Republic  will  join  the  European  con- 
cert. ...  It  may  be  visionary  to  specu- 
late how  the  other  musicians  will  receive  such  an 
advent.  To  me  only  one  result  seems  possi- 
ble: Europe  will  have  to  send  her  sons  home 
from  the  barrack  and  camp,  that  in  the  forge 
and  workshop  they  may  take  part  in  a  strug- 
gle keener  than  that  of  Waterloo.  The  con- 
test will  be  industrial.  Shuttles,  picks  and 
hammers  will  be  the  weapons.  The  victory 
like  that  of  military  encounters,  will  mean  sur- 
vival to  the  fittest;  but  the  fittest  here  is  the 
one  possessing  the  most  efficient  and  economi- 
cal industrial  system."* 

This  would  be  the  rational  way  of  meeting 
American  competition ;  but,  with  their  infatua- 
tion for  direct  remedies,  the  nations  of  the  old 
world  are  agitating  for  increased  "protective" 
tariffs.  In  Germany  the  effort  has  been  suc- 
cessful, and  duties  on  American  products  are  to 
be  largely  increased.  The  inevitable  conse- 
quences will  be  poorer  food  for  the  workers, 
dearer  raw  material  for  manufacturers,  and  a 

*"TJncle  Sam  at  Home,"  pp.  239-240. 


xxii  THE  TRUST:    ITS  BOOK 

further  handicapping  of  German  industry  in' 
competition  with  America.  In  Austria  a 
movement  has  been  started  for  a  European 
combination  against  America,  which  will  prove 
abortive  if  attempted.  In  the  old  country 
the  people  are  being  roused  by  the  cry :  Wake 
up,  England !  and  protectionist  petitions  are 
being  presented  in  Parliament.  It  will  be 
found,  however,  that  the  only  way  in  which 
American  competition  can  be  even  partially 
met — it  is  beyond  the  power  of  any  old-world 
nation  to  do  more — is  to  adopt  more  economi- 
cal social  as  well  as  industrial  methods,  so  as  to 
assimilate  them  to  those  prevailing  on  this 
side. 

And  while  they  are  talking,  America  is  going 
"right  ahead."  A  comparison  of  the  growth 
of  our  export  trade  with  that  of  other  nations 
shows  that  the  United  States  in  the  last  fiscal 
year  (July,  1901)  has  made  by  far  the  greatest 
advance  of  any  nation.  During  the  year  the 
increase  of  exports  from  the  United  States  has 
averaged  $9,000,000  a  month;  that  of  the 
United  Kingdom,  $3,000,000;  Russia,  $3,000,- 
ooo ;  France,  $2,000,000;  Canada,  $2,000,000; 
Austria-Hungary,  $1,000,000;  Mexico,  $1,000,- 
ooo ;  Germany  a  loss  of  $2,000,000  a  month; 
Spain  a  similar  loss,  and  Belgium  a  loss  of 
$1,000,000  a  month.  In  other  words  the 
increase  of  the  Republic's  exports  was  more 
than  twice  as  great  as  that  of  the  whole  of 
Europe. 


INTRODUCTION  xxiii 

While  our  sales  to  Europe  have  been  in- 
creasing at  a  surprising  rate,  our  purchases 
abroad  have  diminished  to  a  degree  fully  justi- 
fying the  foreign  alarm.  Our  total  imports 
of  manufactures  in  1900  amounted  to  less  than 
we  paid  for  foreign  woollens  and  cottons  in 
1880.  For  the  last  two  years  the  balance  of 
trade  has  been  in  our  favour  to  the  unexampled 
total  of  $1,313,000,000,  while  every  European 
nation,  with  the  single  exception  of  Austria, 
has  had  balance  of  trade  against  it.  During 
the  last  four  years  our  balance  of  trade  in 
manufactures  alone  amounted  to  more  than 
the  total  balance  of  all  trade  since  the  founding 
of  the  Republic. 

This  favourable  trade  balance  is  not  limited 
to  our  commerce  with  Europe,  however.  It 
characterizes  our  dealings  with  nearly  every 
part  of  the  world.  During  the  last  decade  we 
have  reduced  our  imports  from  Europe  from 
$474,000,000  to  $439,000,000,  while  in  the 
same  time  we  have  increased  our  exports  from 
$682,000,000  to  $1,111,000,000.  From  British 
North  America  imports  fell  from  $151,000,000 
in  1890  to  $131,000,000  in  1900,  while  exports 
increased  from  $95,000,000  to  $202,000,000. 
The  imports  from  South  America,  principally 
of  raw  material,  increased  but  a  million  dollars, 
while  our  exports  increased  six  times  as  much. 
From  Africa,  imports  increased  from  $3,000,000 
in  1890  to  $9,000,000  in  1900;  while  our  ex- 
ports leaped  from  $4,500,000  to  $22,000,000 


xxiv  THE  TRUST:    ITS  BOOK 

during  this  period.  So  it  is  all  over  the  world. 
Generally  our  dependence  on  other  countries 
has  been  conspicuously  reduced  during  the 
decade,  while  the  nations  have  largely  in- 
creased their  demands  for  our  products. 

This  is  a  record  of  only  ten  years,  despite  the 
interruption  of  the  war  with  Spain.  "  Veni, 
vidi,  vinci"  is  surely  the  motto  of  the  American 
manufacturer;  for  although  the  contest  has 
only  just  begun,  its  final  completeness  is  clearly 
indicated.  The  consular  reports  of  our  for- 
eign trade  show  that  we  are  actually  sending 
cutlery  to  Sheffield,  iron  to  Birmingham,  ship- 
plates  to  Glasgow,  silks  and  shoes  to  Paris, 
beer  to  Germany,  even  maccaroni  to  Italy, 
and  Spain  is  seriously  asking  herself  if  she  may 
not  expect  to  see  American  oranges  offered 
in  the  markets  of  Valencia !  In  a  contest  of  a 
few  years  we  have  gained  such  victories  that 
we  are  warned  in  an  official  publication  of  the 
State  Department  of  "the  possible  conse- 
quences to  our  European  trade  of  a  rivalry  on 
our  part  which  may  be  so  crushing  as  to  greatly 
impair  the  purchasing  power  of  those  who  are 
now  our  best  customers.  If  we  permanently 
cripple  their  chief  industries,"  says  Chief 
Emory,  of  the  Bureau  of  Foreign  Statistics, 
in  his  report  to  Secretary  Hay,  "we  deprive 
them,  to  a  greater  or  less  extent,  of  the  means 
of  buying  from  us,  and  the  consumption  of  our 
food  supplies  and  our  raw  materials,  as  well  as 
of  our  finished  goods,  may  be  greatly  curtailed. '' 


INTRODUCTION  xxv 

And  the  warning  is  echoed  by  our  consul  to 
Berlin,  Mr.  Mason,  who  writes  that  Germany  is, 
"after  England,  our  best  customer,  and  any- 
thing which  checks  the  prosperity  of  her  people 
will  diminish  to  that  extent  their  ability  to 
maintain  the  reciprocal  trade  which  is  now  so 
heavily  in  favour  of  the  United  States." 

Such  utterances  are  interesting  as  illustra- 
tions of  the  completeness  of  the  American 
manufacturers'  victory;  but  as  warnings  they 
are  valueless.  There  is  a  law  of  commercial 
gravity,  by  which  products  of  all  kinds  flow 
to  the  best  markets;  and  the  conditions  which 
make  the  best  markets  are  too  complex  to  be 
affected  by  academic  opinions  and  prophecies, 
however  wise  and  farsighted  they  may  be. 
The  cheapness  and  excellence  of  American 
goods  are  the  factors  governing  their  accept- 
ance in  preference  to  others;  and  it  is  not 
probable  that  any  of  the  European  nations 
will  be  able  to  compete  with  America  in  econ- 
omy of  manufacture.  We  have  the  raw 
material  of  most  of  our  exports  in  unlimited 
abundance.  Our  coal-beds  and  ore  deposits 
are  of  vast  extent,  and  their  product  can  be 
increased  indefinitely  as  the  markets  demand, 
and  every  increase  is  accompanied  by  econo- 
mies. But  in  Europe  this  is  not  so.  There 
conditions  are  reversed.  Every  known  source 
of  supply  has  been  exploited  to  its  fullest 
economical  capacity,  so  that  every  increase 
of  output  must  be  accompanied  by  advance  of 


xxvi  THE  TRUST:    ITS  BOOK 

cost.  In  coal,  this  is  notably  the  case,  for 
owing  to  the  great  depth  of  many  of  the  mines 
the  output  per  worker  is  steadily  diminishing 
with  constantly  increasing  cost.  In  America, 
the  tendency  of  prices  has  been  downward  for 
many  years. 

Notwithstanding  the  vast  distances  which 
our  raw  materials  must  travel  to  reach  the 
factory  or  the  furnace,  our  systems  of  trans- 
portation are  so  complete  that  the  charge 
for  freighting  has  but  an  insignificant  part 
in  the  final  cost  of  the  finished  product. 
We  can  bring  a  ton  of  ore  from  the  head 
of  Lake  Superior  to  the  blast  furance  at 
Pittsburg  for  less  than  the  Londoner  pays 
for  carrying  his  coal  from  the  wharves 
into  his  cellar.  Our  freight  rates  are 
only  one-quarter  as  much  as  in  England. 
In  thirty  years  the  average  rate  per  ton-mile 
dropped  from  1.94  cents  to  0.73;  yet  our  rail- 
ways are  prosperous  and  increasing  their  divi- 
dends, while  those  of  England  are  annually 
falling  behind.  The  increased  expense  of  op- 
erating fifteen  of  the  principal  railways  in 
England  in  1900  as  compared  with  the  pre- 
vious year  was  a  million  and  a  quarter  sterling, 
while  the  net  receipts  decreased  by  an  even 
greater  sum.  In  the  same  year  the  net  earn- 
ings of  American  railroads  was  seventy-three 
million  dollars  more  than  in  any  previous 
year,  and  over  twenty-seven  and  a  half  million 


INTRODUCTION  xxvii 

dollars  were  paid  in  dividends  more  than  ever 
before,  while  an  even  larger  sum  was  carried 
forward. 

To  summarize  the  results  of  a  single  genera- 
tion's activity,  it  may  be  stated  that  between 
1870  and  1900,  America  doubled  her  popula- 
tion, but  her  railway  tonnage  increased  more 
than  twice  as  fast,  while  her  interlake  traffic 
multiplied  thirty-one  times.  While  the  pro- 
duction of  wheat  and  corn  just  keep  pace  with 
the  increase  of  her  people,  the  domestic  cotton 
used  up  in  her  own  mills  was  trebled,  and  the 
coal  product  increased  six-fold.  Of  petro- 
leum the  output  multiplied  eleven  times;  of 
steel  one  hundred  and  fifty-three  times.  While 
her  total  exports  increased  256  per  cent.,  her 
exports  of  manufactures  advanced  535  per  cent. 
"Imports  of  all  classes"  decreased  in  ratio 
to  population,  but  purchases  abroad  of  some 
raw  materials,  like  silk,  were  multiplied  twenty- 
one  times.  The  money  in  circulation  in- 
creased twice  as  fast  as  the  population.  The 
wealth  of  the  country  was  trebled,  as  was  the 
total  of  deposits  in  national  banks.  While  the 
production  of  gold  and  silver  was  doubled,  that 
of  pig-iron  was  multiplied  thirteen  times  and  of 
copper  twenty-two  times.  Cotton  was  pro- 
duced, manufactured  and  exported  nearly 
twice  as  fast  as  the  growth  of  the  population ; 
the  expenditures  on  education  increased  in 
the  same  ratio;  post  office  receipts  moved  half 
as  fast  again;  telegrams  increased  seven-fold, 


xxviii          THE  TRUST:    ITS  BOOK 

and  the  patents  issued  six-fold.  In  a  long  list 
of  such  facts  the  only  ones  exhibiting  decreases 
were  national  indebtedness,  cost  of  railway 
transportation,  importations  of  foreign  goods, 
and  the  vessels  engaged  in  foreign  trade. 

In  a  minor  degree  the  processes  which  have 
wrought  such  great  changes  in  America  are 
operative  in  Europe.  With  us  the  movement 
has  been  especially  rapid  because  of  the  great 
natural  resources  of  our  continent,  the  super- 
ior intelligence  of  our  workmen  due  to  the  in- 
flux of  generations  of  the  more  enterprising 
and  progressive  of  Europeans,  the  adaptability 
fostered  by  a  new  country,  and  the  mechani- 
cal ingenuity  encouraged  by  the  vast  task  of 
building  a  nation  in  the  wilderness.  But  as 
these  processes  have  a  common  origin,  they 
must,  in  the  main,  move  along  similar  evolu- 
tionary lines.  A  brief  survey  of  the  course  of 
social  and  industrial  development  from  primi- 
tive times  not  only  reveals  the  community  of 
origin  and  growth  of  the  economic  institutions 
of  civilized  communities,  but  indicates,  with 
more  or  less  distinctness,  the  lines  along  which 
future  progress  will  probably  run. 

The  foundation  of  our  social  system  was  laid 
when,  in  primitive  times,  the  struggle  for  ex- 
istence was  welding  fighting  units  into  families, 
and  families  into  clans.  Its  growth  was  pro- 
moted when  these  in  turn  combined  with  other 


INTRODUCTION  xxix 

clans  to  oust  a  neighbouring  tribe  from  a 
specially  desirable  pasturage,  or  to  maintain 
their  own  particular  valley  against  invaders. 
The  simple  tribal  organization  thus  resulting 
was  that  which  obtained  among  the  North 
American  Indians  when  the  white  man  first 
appeared  on  this  continent.  It  was  also  that 
which  Julius  Caesar  found  'when  he  landed  in 
Britain.  The  building  of  a  nation  out  of  such 
separate  tribes  was  effected  by  the  operation 
of  the  same  great  law — the  struggle  for  exist- 
ence. War  was  the  unifying  power  from  the 
outset.  It  has  continued  so  to  be  down  to  our 
own  time.  It  savours  of  the  paradox  to  say 
that  the  blessings  of  civilization  are  due  to  war ; 
but  it  is  none  the  less  a  fact.  Without  social 
union  there  could  be  no  civilization;  without 
war  there  could  have  been  no  social  union. 

The  evolution  of  industrial  institutions  dis- 
plays the  same  general  features.  At  first  the 
individual  was  self-sufficing.  Then  as  the 
complexity  of  life  increased,  his  efforts  were 
joined  to  those  of  neighbours:  one  made  the 
arrows,  another  shot  them.  One  woman  gath- 
ered reeds  and  fibres;  another  wove  them  into 
baskets  and  nets.  Later,  a  simple  form  of 
barter  was  set  up  with  neighbouring  clans  or 
tribes.  One  had  fish  to  trade  for  meat;  and 
in  the  course  of  time  some  bead-like  orna- 
ment was  used  as  a  measure  of  value,  and  lo  ! 
money  had  been  invented.  Or  perhaps  a 
bed  of  salt  was  found  within  the  tribal  pre- 


xxx  THE  TRUST:    ITS  BOOK 

cincts,  and  the  community  grew  rich  by  ex- 
changing it  for  the  desirable  commodities  of 
other  tribes.  In  this  way  a  rudimentary  in- 
dustrial system  was  formed  and  fostered  dur- 
ing the  rare  intervals  of  peace  enjoyed  by 
primitive  communities.  As  the  tribe  grew 
more  numerous  or  was  affiliated  by  marriage 
and  military  alliances  with  neighbouring  tribes, 
the  process  of  industrial  differentiation  went 
on,  until  each  community  developed  a  spe- 
cialty. The  Navajos  made  a  blanket  of  great 
beauty  and  value.  The  Pomos  wove  baskets 
that  would  hold  water.  The  Flatheads  and 
Snakes  cured  salmon  so  that  it  would  bear 
transportation  a  thousand  miles.  Obsidian 
arrow-heads  have  been  traced  hundreds  of 
miles  from  any  natural  deposit  of  this  mineral ; 
and  wampum  made  from  sea-shells  has  been 
found  in  the  middle  of  the  continent.  While 
this  tribal  specialization  was  going  on,  a  similar 
process  was  at  work  within  the  community 
itself;  and  families  developed  aptitudes  which 
led  to  increasing  varieties  of  products.  Among 
peoples  less  given  to  war  than  the  North  Ameri- 
can Indians,  the  differentiation  of  workers  was 
more  rapid;  and  the  relation  of  master  and 
apprentice,  of  employer  and  employed,  was  es- 
tablished. Wages  thus  originated;  and  soon 
the  workshop  developed  into  the  factory. 
And  so  by  slow  and  gradual  growth,  from  the 
simple  to  the  complex,  from  the  indefinite  to  the 
definite,  from  the  homogeneous  to  the  hetero- 


INTRODUCTION  xxxi 

geneous — which  are  all  terms  of  the  law  of 
evolution — the  modern  stage  of  industrialism 
common  to  all  civilized  communities  has  been 
reached. 

Up  to  this  point  the  economic  growth  of 
society  has  undeviatingly  followed  evolution- 
ary lines.  These,  indeed,  were  the  only  lines 
open  to  it  so  long  as  it  retained  a  progressive 
character,  since  growth,  progress,  and  evolu- 
tion are  synonymous.  At  times,  during  the  dark 
ages,  there  have  been  temporary  hindrances 
and  even  set-backs  to  the  movement,  as  when 
the  industrial  systems  of  the  Moors  were  de- 
stroyed in  Spain ;  but,  broadly  speaking,  there 
has  been  no  break  in  the  continuity  of  that 
advance  from  the  simple,  indefinite  and  inco- 
herent efforts  of  primitive  men  to  supply  their 
natural  wants,  to  that  complex,  definite  co- 
herency which  marks  modern  methods  of 
meeting  the  same  natural  needs. 

The  nature  of  the  growth  of  industrialism 
from  its  simple  beginnings  to  its  present  com- 
plex stage,  can  thus  be  explained  and  defined 
in  exact  terms  by  the  law  of  evolution.  Can 
this  law  do  more?  Can  it  indicate  with  any 
approach  to  certainty  the  lines  of  further  pro- 
gression ?  Let  us  see. 

There  is  a  term  in  the  complete  definition  of  < 
the  law  of  evolution  which  has  not  been  ad- 
verted to.     As  a  factor  in  the  growth  of  society 
it  is  not  so  conspicuous  as  some  others,  that  of 
increasing    definiteness,    for    example.     It    is 


xxxii          THE  TRUST:    ITS  BOOK 

nevertheless  clearly  traceable  in  the  past 
development  of  industrialism.  It  is  becoming 
increasingly  noticeable  in  the  tendencies  now 
visibly  operative,  especially  in  American  eco- 
nomic developments.  This  final  term  is  that 
of  the  "concomitant  dissipation  of  motion." 
Translated  into  everyday  phraseology,  this 
means  a  diminishing  waste  of  energy,  a  less 
frequent  slipping  of  cogs,  the  avoidance  of 
needless  multiplication  of  activities.  And  here 
is  where  the  centralization  of  capital,  the 
decay  of  destructive  competition,  the  protec- 
tive combination  of  all  the  factors  of  produc- 
tion, are  shown  to  have  their  place  in  the  great 
chain  which  links  us  to  the  past.  Here  is 
where  co-operation  arises  with  its  attendant 
economies,  to  complete  and  round  off  the  great 
natural  development  which  has  taken  us  thou- 
sands of  years  to  reach.  The  "concomitant 
dissipation  of  motion"  stands  conspicuously 
out  of  every  one  of  the  following  essays,  though 
it  is  doubtful  if  all  the  great  men  of  action 
who  wrote  them  fully  recognized  it  as  part  of 
the  great  natural  law  underlying  the  social 
phenomena  they  describe.  This,  indeed,  is 
the  characteristic  of  natural  laws:  recognized 
or  ignored,  they  never  cease  to  be  operative,  nor 
can  they  be  repealed  by  Congress  or  vetoed  by 
President. 

Here,  then,  we  get  an  indication  of  the  lines 
along  which  future  economic  development  will 
take  place.  The  movement  towards  co-opera- 


INTRODUCTION  xxxiii 

tion,  towards  the  elimination  of  unintelligent 
competition,  towards  the  peaceful  alliance  of 
labour,  capital  and  brains,  towards  the  in- 
creasing centralization  of  industries,  which  is 
the  most  pronounced  characteristic  of  Ameri- 
can civil  life, — this  movement,  being  in  har- 
mony with  the  laws  underlying  all  progress,  is 
destined  to  extend  until  it  covers  the  whole 
industrial  world,  or  until  it  merges  into  some 
new  and  better  phase  of  social  evolution.  Thus 
the  old  hated  "Trust,"  the  immediate  fore- 
runner of  the  present  "Merger,"  receives  the 
benediction  of  Nature  herself,  the  sanction  of 
the  very  laws  of  life.  We  are  astride  of  a 
tendency  which,  originating  in  the  barbaric 
past,  is  giving  us  the  promise  of  a  fuller  and 
more  complete  national  life  than  the  world  has 
ever  seen.  In  the  broad  perspective  of  history, 
illuminated  by  the  light  of  evolutionary  law, 
we  are  able  to  see  that  this  tendency  is  not  the 
creation  of  self-seeking  capitalists,  aiming  to 
corrupt  our  moral  and  political  life,  and  under- 
mining the  very  foundations  of  society  by 
destroying  competition  and  competitors. 
Neither  is  it  a  mere  hobby-horse  from  which 
we  can  descend  at  the  bidding  of  legislators. 
It  is  a  wholesome,  irresistible,  natural  pro- 
gression from  lower  forms  of  industrial  life  to 
higher  ones.  It  is  a  phase  of  economic  evolu- 
tion having  its  roots  at  the  gates  of  Eden,  con- 
trolled by  laws  as  regular  as  those  which 
mould  the  falling  raindrop.  When  St.  Paul 


xxxiv         THE  TRUST:    ITS  BOOK 

wrote,  "Whatsoever  is,  is  good,"  he  thereby 
voiced  not  only  the  desirability  of  what  we 
call  progress,  but  the  inevitableness  of  it. 
And  this  is  what  we  need  to  emphasize:  the 
inevitableness  of  it. 

Reduced  to  its  simplest  expression,  the 
struggle  for  existence,  or,  in  other  words,  the 
law  of  competition,  has  been  the  natural  force 
underlying  industrial  development.  We  are 
often  told  that  this  struggle  for  existence  has 
only  changed  its  outward  shape:  that  in  es- 
sence it  must  ever  remain  that  which  our 
forefathers  knew  when  they  fought  with  tooth 
and  nail  in  defence  of  their  cave  home  or  the 
hard-won  trophies  of  the  chase.  Is  this  true? 
Is  the  law  of  competition  Nature's  first  and 
last  word  to  her  children?  Is  humanity 
destined  for  ever  to  struggle  with  itself?  Is 
this  Nature,  "red  in  tooth  and  claw,"  in- 
capable of  modification  and  improvement? 
Is  success  never  to  be  dissociated  from  battle 
and  victory?  Is  it  contrary  to  the  nature  of 
things  that  men  cannot  live  except  by  conquest 
of  others?  We  think  not.  The  ingenuity  of 
man  and  his  dominion  over  the  forces  of  nature 
are  great  enough,  now-a-days,  to  ensure  to 
every  civilized  being  both  subsistence  and 
comfort.  It  only  remains  to  so  apportion  the 
daily  yield  of  our  common  mother-earth  as  to 
secure  the  easy  existence  of  every  unit  of  our 
nation;  and  the  problem  is  by  no  means  in- 


INTRODUCTION  xxxv 

capable  of  solution  when  we  have  transferred 
our  energies  from  mutual  competition  to  uni- 
versal co-operation.  As  militancy  first  com- 
pelled national  unity,  so  the  warring  factions 
of  industrialism  are  being  forced  into  protec- 
tive alliances.  This  is  the  purport  of  the 
latest  phase  of  social  evolution.  If  under 
modern  conditions  fifty  men  can  feed  a  thou- 
sand and  another  fifty  can  clothe  them,  the 
struggle  for  existence  has  ceased;  there  should 
now  be  enough  peaceful  leisure  for  all  to  develop 
the  best  that  is  in  them.  Nor  need  we  await 
the  coming  of  some  Messiah  to  teach  us  how 
to  divide  the  results  of  human  activity  so  as  to 
subserve  the  best  interests  of  the  nation. 
Nature  herself  is  showing  us,  by  leading  us 
out  of  the  strife  of  competition  into  the  paths 
of  peaceful  co-operation.  Under  a  rational 
industrialism,  of  which  the  yet  imperfect  at- 
tempts at  centralization  are  the  beginning, 
we  are  to  pass  from  the  cruel  egoism  of  old 
systems  to  the  kindly  altruism  of  the  new. 

This  is  not  mere  sentimentality;  it  is  the 
logical  outcome  of  forces  always  at  work  within 
and  around  us.  Just  as  there  has  come  a  time 
when,  on  this  continent  at  least,  war  has  given 
all  of  good  that  it  has  to  give,  so  is  there  coming 
a  time  when  competition — which  is  industrial 
war — will  have  conferred  on  the  nation  all  its 
possible  benefits.  A  perfected  system  of  co- 
operation is  the  promise  to  civilized  mankind 
of  existing  tendencies.  The  defects  due  to  in- 


xxxvi          THE  TRUST:    ITS  BOOK 

complete  evolution  will  soon  cease  to  obscure 
the  progressive  and  beneficial  character  of  the 
movement.  The  evils  which  have  discredited 
it  and  provoked  hostility,  the  over  capitaliza- 
tions, stock  jobbings  and  underhand  business 
methods  sometimes  accompanying  the  change, 
are  but  accidental  survivals  of  the  lower  in- 
dustrial life,  and  are  in  no  sense  either  perma- 
nent or  inevitable  features  of  the  higher  one 
towards  which  we  are  rapidly  moving.  It  is 
to  these  intruding  remnants  of  a  passing  con- 
dition that  legislative  restraint  should  be 
directed,  and  strictly  limited. 

To  the  nations  of  the  old  world  the  special 
portent  of  the  new  industrialism  is  not  less 
significant.  To  the  student  there  is  a  deeper 
meaning  than  appears  on  the  surface  in  the 
disquieting  apparition  of  American  manufac- 
tures in  Europe.  The  commercial  invasion, 
just  begun,  is  destined  to  bring  about  a  com- 
plete revolution  of  existing  economic  and 
social  theories  and  practices.  This  revolution 
will  be  more  comprehensive  than  anything 
that  has  preceded  it  in  time.  It  involves  a 
complete  revision  of  social  ideals.  It  means 
the  final  abandonment  of  the  military  regime 
in  favour  of  an  industrial  system  in  which  per- 
sonal liberty  will  receive  a  new  and  wider 
meaning.  It  means  the  substitution  of  federal- 
ism for  feudalism;  the  relegation  of  inherited 
privilege  to  the  "scrap-heap,"  with  other 


INTRODUCTION  xxxvii 

worn-out  machinery  of  the  past.  Every  labour- 
saving  device  which  gives  the  American  manu- 
facturer an  advantage  over  his  adversaries — 
for  the  contest  is  keen  enough  to  justify  the 
use  of  militant  terms — has  a  political  meaning, 
hidden  maybe  to  the  man  who  operates  it, 
but  nevertheless  plainly  visible  to  the  intelligent 
onlooker.  The  hum  of  machinery  in  New 
England  and  the  clatter  of  Pennsylvania 
workshops  are  becoming  more  eloquent  of 
peace  than  the  rescript  of  the  Czar  of  all  the 
Russias.  We  are  forcing  mankind  to  recog- 
nize that  even  such  a  prosaic  thing  as  a  potato- 
peeling  machine,  may  carry  a  text  into  homes 
closed  to  printed  books.  The  whirr  of  an 
American  reaping  machine,  heard  by  peasants 
in  the  fields  of  Central  Russia,  may  teach  a 
lesson  where  Rousseau  and  Victor  Hugo  would 
never  be  heard,  nor  understood  if  heard.  This 
is  the  only  true  and  worthy  triumph  of  our 
industrial  supremacy.  In  itself,  there  is  noth- 
ing ennobling  in  the  underselling  of  competitors. 
The  successful  warrior,  waving  aloft  the  gory 
scalp-lock  of  his  enemy,  enjoyed  the  same 
sense  of  triumph.  But  if  the  contest  sug- 
gests a  new  thought  concerning  the  rights  of 
man,  the  world  is  the  better  for  it.  If  by 
commercial  stress  the  peoples  of  the  old  world 
are  forced  home  from  the  barrack  and  camp 
into  the  forge  and  workshop,  then  the  indus- 
trial supremacy  of  America  unconsciously 
takes  on  an  aspect  of  beneficence.  If  by  in- 


xxxviii        THE  TRUST:     ITS  BOOK 

vading  the  world's  markets,  we  can  bring  about 
the  abolition  of  militancy,  our  mechanical 
superiority  receives  a  new  and  nobler  meaning. 
That  the  social  as  well  as  the  economic  systems 
of  the  world  are  being  profoundly  affected  by 
American  industrialism  brought  into  the  homes 
of  the  people  of  every  land,  is  obvious  to  all 
who  keep  in  touch  with  this  latest  expression 
of  Americanism.  "Liberty  enlightening  the 
world,"  is  more  than  a  gigantic  toy.  It  is  the 
true  symbol  of  our  mission  to  mankind;  and 
every  ship  that  passes  through  its  great  shadow, 
freighted  with  our  products,  is  a  white-winged 
messenger  of  peace  to  the  armed  camps  of 
Europe.  Let  our  national  exultation  be  over 
this,  rather  than  over  the  defeat  of  rivals. 


THE   TRUST:  ITS   BOOK 

CHAPTER   I 

COMBINATIONS  AND  CRITICS 
CHARLES  R.  FLINT 

THE  time  has  come  when  indiscriminate 
criticism  of  industrial  combinations  should  be 
condemned.  They  have  been  compared  to 
"corners"  in  food  products,  or  in  stocks  or 
other  investment  securities,  and  yet  they  are 
the  direct  opposite  of  such  "corners."  "Cor- 
ners" produce  nothing.  The  end  they  bring 
about  is  absorption  and  stagnation.  They 
have,  without  justification,  been  compared  to 
monopolies  with  all  their  attendant  evils.  It 
should  be  borne  in  mind  that  the  "habit  of 
supposing  extreme  cases,  and  then  of  reasoning 
from  them,  is  the  constant  refuge  of  those  who 
are  obliged  to  defend  a  cause  which,  upon  its 
merits,  is  indefensible."  In  the  main  only 
such  arguments  have  been  used  by  the  oppo- 
nents of  these  combinations. 

While  conceding  that  some  of  the  alleged 
disadvantages  may  exist,  it  can  be  shown  that, 
for  the  most  part,  they  are  imaginary  or  theo- 
retical, while  the  advantages  are  real  and  sub- 
stantial, and  of  sufficient  importance  wholly 


2  THE  TRUST:    ITS  BOOK 

to  overshadow  the  disadvantages,  and  to  justify 
us,  as  employers  of  labour,  as  men  with  money 
invested  in  manufacture,  and  as  citizens  of 
the  Republic,  in  advocating  these  combina- 
tions by  voice  and  act  until  there  shall  be 
established  concerning  them  a  healthy  public 
opinion,  instead  of  the  spurious  article  which 
some  men  and  newspapers  would  put  into 
circulation. 

The  truth  is  that  such  combinations  are  the 
evolution  of  our  manufacturing  industries,  and 
the  advantages  arising  from  them  are  similar 
to  those  which  resulted  from  the  original  in- 
troduction of  manufacture  into  this  country. 
They  represent  the  highest  development  of 
manufacturing,  as  do  extended  railway  sys- 
tems of  transportation  on  land,  the  ocean  grey- 
hound of  transportation  on  the  sea,  the  national 
banking  system  of  exchange,  the  telegraph  and 
telephone  systems  of  communication. 

Every  American  citizen  is  interested  in  the 
discussion  and  right  solution  of  these  questions, 
for,  as  Daniel  Webster  has  said, "The  manu- 
facturing interest  is  a  general,  and  not  a  local 
interest;"  and  in  considering  the  causes  which 
might  operate  to  limit  the  growth  and  ex- 
pansion of  manufacture,  he  used  these  words : 

"Who,  standing  here,  looking  around  on  this  commu- 
nity and  its  interests,  would  be  bold  enough  to  touch 
the  spring  which  moves  so  much  industry  and  produces 
so  much  happiness?  Who  would  shut  up  the  mouths 
of  these  vast  coal  pits  ?  Who  would  stay  the  cargoes  of 


COMBINATIONS  AND  CRITICS  3 

manufactured  goods  now  floating  down  a  river,  one  of 
the  noblest  in  the  world,  stretching  through  territories 
almost  boundless  in  extent  and  unequalled  in  fertility  ? 
Who  would  quench  the  fires  of  so  many  steam  engines 
and  check  the  operation  of  so  much  well-employed 
labour?" 

Compare  that  view, — broad,  statesmanlike, 
comprehensive, — with  the  expression  of  the 
French  philosopher: 

"The  machines  designed  to  abridge  art  are  not  always 
useful.  When  a  piece  of  workmanship  is  of  a  moderate 
price,  equally  agreeable  to  the  maker  and  buyer,  those 
machines  which  would  render  the  manufacture  more 
simple,  or,  in  other  words,  diminish  the  number  of  work- 
men, would  be  pernicious.  And  if  water-mills  were  not 
everywhere  established,  I  should  not  have  believed  them 
so  useful  as  is  pretended,  because  they  have  deprived  an 
infinite  multitude  of  their  employment,  a  vast  number 
of  persons  from  the  use  of  water,  and  a  great  part  of  the 
land  of  its  fertility." 

These  two  views  are  to-day  variously  dressed 
and  presented ;  but,  when  stripped  of  verbiage, 
the  arguments  for  and  against  manufacturing 
extension,  resolve  themselves  substantially  into 
the  opinions  quoted.  No  one  can  doubt  which 
represents  true  enlightenment  and  the  best 
interest  of  the  American  Commonwealth. 

In  every  age  there  have  been  those  who  have 
set  their  faces  against  innovation.  No  marked 
progress  has  been  made  in  science,  and  no  new 
movement  of  reform  has  successfully  established 
itself  in  public  favour,  until  opposition  has 
been  overcome, 


4  THE  TRUST:    ITS  BOOK 

Macaulay,  in  his  reference  to  the  introduc- 
tion of  the  stage  coach  in  England,  says : 

"This  mode  of  travelling,  which  by  Englishmen  of  the 
present  day  would  be  regarded  as  insufferably  slow, 
seemed  to  our  ancestors  wonderfully  and  alarmingly 
rapid.  In  a  work  published  a  few  months  before  the 
death  of  Charles  II.,  the  English  coaches  are  extolled  as 
very  superior  to  any  similar  vehicles  ever  known  to  the 
world.  Their  facility  is  the  subject  of  special  discussion 
and  is  favourably  contrasted  with  the  sluggish  pace  of 
the  Continental  Post.  But  with  boasts  like  these  was 
mingled  the  sound  of  complaint  and  invective.  The 
interests  of  a  large  class  had  been  unfavourably  affected 
by  the  establishment  of  the  new  diligence,  and,  as  usual, 
many  persons  from  mere  stupidity  and  obstinacy  were 
disposed  to  clamour  against  the  innovation  simply  be- 
cause it  was  an  innovation.  It  was  vehemently  argued 
that  this  mode  of  conveyance  would  be  fatal  to  the  breed- 
ing of  horses  and  to  the  noble  art  of  horsemanship;  that 
the  Thames,  which  had  long  been  an  important  nursery 
of  seamen,  would  cease  to  be  the  chief  thoroughfare  from 
London  up  to  Windsor  and  down  to  Gravesend;  that 
saddlers  and  spurriers  would  be  ruined  by  hundreds; 
that  numerous  inns  at  which  mounted  travellers  had  been 
in  the  habit  of  stopping,  would  be  deserted  and  would 
no  longer  pay  any  rent ;  that  the  new  carriages  were  too  hot 
in  summer  and  too  cold  in  winter;  that  the  passengers 
were  grievously  annoyed  by  invalids  and  crying  children; 
that  the  coach  sometimes  reached  the  inn  so  late  that 
it  was  impossible  to  get  supper,  and  sometimes  started 
so  early  that  it  was  impossible  to  get  breakfast.  On 
these  grounds  it  was  gravely  recommended  that  no  public 
coach  should  be  permitted  to  have  more  than  four  horses, 
to  start  oftener  than  once  a  week,  or  to  go  more  than 
thirty  miles  a  day.  It  was  hoped  that  if  this  regulation 
were  adopted,  all  except  the  sick  and  lame,  would  return 
to  the  old  mode  of  travelling.  Petitions  embodying  such 


COMBINATIONS  AND  CRITICS  5 

opinions  as  these  were  presented  to  the  King  and  Counsel 
from  several  companies  of  the  City  of  London,  from 
several  provincial  towns  and  from  the  justices  of  several 
counties.  We  smile  at  these  things.  It  is  not  impossible 
that  our  descendants  when  they  read  the  history  of  the  opposi- 
tion offered  by  cupidity  and  prejudice  to  the  improvements 
of  the  Nineteenth  Century,  may  smile  in  their  turn. " 

No  passage  from  history  could  better  illus- 
trate the  character  of  the  present  outcry  of 
some  newspapers  and  of  some  men,  against 
the  consolidation  of  manufacturing  intelligence 
and  capital.  These  industrial  combinations 
have  arisen  naturally  enough  if  you  seek  for 
their  origin.  A  man  who,  by  intelligence  and 
constant  application,  has  built  up  a  successful 
manufacturing  business,  has  frequently  an 
income-producing  property  which  can  not  be 
transmitted  to  his  heirs.  He  has  only  a  life 
interest  in  the  business,  and  often  such  a  prop- 
erty, successful  during  the  lifetime  of  its  founder, 
has  disintegrated  on  his  death,  or  even  when 
old  age  and  infirmity  have  overtaken  him. 
Now  an  opportunity  is  afforded  to  the  founder 
to  consolidate  his  establishment  with  similar 
institutions,  so  that  it  will  be  a  part  of  a  great 
combination,  in  which  no  one  man  is  an  es- 
sential factor.  He  is  able  to  dispose  in  whole 
or  in  part  of  his  distributive  share  in  this 
organization,  through  the  market  such  large 
corporations  create  for  their  securities,  which 
yielding  on  the  average  a  larger  return  than 
bonds  or  railroad  stocks,  are  therefore  more 
attractive  to  investors.  Or  if  he  has  retained 


6  THE  TRUST:    ITS  BOOK 

the  securities  he  has  received,  his  estate  under 
such  circumstances  is  easily  distributed.  In- 
stead of  there  being  a  partition  of  an  isolated 
property  of  uncertain  value  or  duration,  the 
interests  to  be  divided  represent  a  part  of  a 
great  whole. 

The  absorption  of  one  manufacturing  in- 
dustry by  another,  or  a  combination  or  con- 
solidation of  the  two,  means  not  alone  the 
aggregation  of  mere  wealth — that  is  not  so 
important;  it  means  the  aggregation  of  in- 
tellect, reduction  of  expenses,  the  production 
of  a  better  article,  larger  distribution,  and 
larger  profits  to  the  new  organization  without 
increased  cost  to  the  consumer.  It  means  a 
larger  field  for  usefulness,  for  capital  and 
labour. 

The  labouring  masses  have  often  opposed 
the  introduction  of  labour-saving  appliances; 
but  time  has  shown  that  such  inventions  have 
benefited  the  poor  more  than  the  rich.  The 
agricultural  and  other  machinery  in  this  coun- 
try is  equivalent  to  the  combined  effort  of  a 
population  of  over  400,000,000;  its  benefits 
are  distributed  among  the  80,000,000  of  our 
population,  and  the  people  of  the  United  States 
are  enjoying  greater  luxuries  than  did  the 
nobility  in  ages  past.  Each  consumer  has 
the  equivalent  of  five  persons  labouring  for 
his  support. 

While  large  fortunes  have  been  made  by 
industrial  developments,  by  the  extension  of 


COMBINATIONS  AND  CRITICS  7 

transportation  by  railroad  and  by  ocean  steam- 
ships, these  large  fortunes,  often  malevolently 
and  unwisely  criticised,  are  insignificant  when 
compared  with  the  accompanying  benefits 
which  have  been  distributed  to  the  general 
public.  The  development  of  these  enterprises 
has  enabled  the  farmer  to  harvest  and  trans- 
port his  products  at  better  prices  than  before, 
and  has  brought  him  in  touch  with  the  markets 
of  the  world.  The  manufacturing  industry 
has  strengthened  the  resources  of  nations. 
Through  it  the  North  was  made  richer  than  the 
South,  and  triumphed  in  the  end.  It  has 
enabled  Germany  to-day  to  be  the  dictator  of 
the  peace  of  Europe.  It  has  made  England 
the  mistress  of  the  seas.  If  the  wise  words  of 
one  of  our  great  statesmen  had  been  heeded, 
the  development  of  manufacturing  interests 
in  the  South  would  have  removed,  to  a  great 
extent,  the  dangers  of  sectional  differences 
which  threatened  our  Union  and  gave  rise  to 
the  war  of  the  Rebellion. 

In  the  material  progress  of  this  generation, 
the  greatest  in  the  history  of  the  world,  the 
evolution  of  manufacture  stands  forth  con- 
spicuous and  pre-eminent.  There  are  many 
among  us  who  can  remember  the  tallow  dip,  the 
spinning  wheel,  the  hand  loom,  the  clothes  of 
homespun.  The  tallow  dip  was  replaced  by 
sperm  oil ;  whalers  flourished,  and  New  Bedford 
became  a  city  of  great  wealth.  Then  capital 
and  intelligence  centred  in  the  industry  of 


8  THE  TRUST:    ITS  BOOK 

producing,  transporting  and  refining  petroleum ; 
and  artificial  light  was  put  at  a  price  which 
made  the  homes  of  the  poor  as  bright  as  those 
of  the  rich.  Later,  gas  was  introduced.  Now 
the  electric  light  has  turned  night  into  day  in 
the  streets  of  all  the  important  towns  in  this 
country;  and  our  police  records  show  a  direct 
and  most  important  result,  if  not  on  morals,  at 
least  on  the  better  protection  of  life  and  prop- 
erty. Where  the  spinning  wheel  was  running 
on  a  single  yarn  not  many  years  ago,  one  hand 
is  to-day  making  by  machinery  a  thousand 
yarns,  and  cotton  cloth  has  been  sold  for  less 
than  three  cents  per  yard.  The  farmer  who  was 
then  capable  of  tilling  a  few  acres,  to-day,  as  the 
intelligent  director  of  a  machine,  harvests  the 
produce  of  a  thousand  acres.  These  are  but  a 
few  illustrations  where,  if  time  permitted, 
hundreds  might  be  cited. 

If  natural  conditions  be  undisturbed,  in- 
dustrial progress  will  continue.  Put  legal  re- 
straint upon  it,  and  sooner  than  any  of  us 
realize,  the  wheels  which  have  been  driving  all 
this  vast  machinery  will  come  to  rest.  Few 
people  appreciate  how  much  of  a  problem  suc- 
cessful manufacture  is.  In  no  other  business 
are  such  sleepless  watchfulness  and  tireless 
attention  required.  If  the  manager  is  able  to 
make  ends  meet,  it  is  well — there  is  at  the 
present  day  often  a  deficit — while  a  profit  is 
evidence  of  the  highest  manufacturing  aptitude. 
If  we  tax  manufacturing  interests  indiscreetly, 


COMBINATIONS  AND  CRITICS  9 

or  otherwise  deal  unwisely  with  them,  they 
will  not  recover  from  the  injury  until  the  re- 
straint is  removed  and  natural  conditions 
again  prevail.  The  State  deems  it  unwise  to 
limit  the  accumulation  of  capital,  the  owner- 
ship of  lands  or  personal  property;  so  should 
public  sentiment  and  public  law  leave  un- 
trammelled the  development  of  the  manufac- 
turing industry. 

The  consolidation  of  manufacturing  interests 
ensures  cheaper  production  through  the  division 
of  labour  and  the  bringing  of  them  under 
one  control  means  continuous  production. 
There  is  nothing  so  harmful  both  to  capital 
and  labour,  as  spasmodic  manufacture.  If 
a  factory  run  one  week,  and  if  it  be  un- 
certain whether  or  not  it  will  run  the 
next  week;  if  it  run  one  day  and  shut 
down  the  next,  the  interference  with  economy 
and  the  harmful  influence  upon  the  workman 
and  capitalist  are  readily  appreciated  by 
those  conversant  with  such  demoralization. 

Our  system  of  protection,  not  extravagant 
for  a  nascent  industry,  but  frequently  too  great 
for  a  developed  one,  has,  notwithstanding  its 
wonderful  benefits,  been  in  some  industries 
productive  of  excessive  investment  and  ex- 
cessive manufacture.  The  result  is  that  com- 
petition, instead  of  being  the  life  of  trade,  has 
in  many  instances  been  the  death  of  trade. 
While  there  are  manufacturers,  especially  those 
catering  to  the  wants  of  the  rich,  who  hold  to  a 


io  THE  TRUST:    ITS  BOOK 

high  standard  of  quality,  severe  competition 
as  a  general  rule  forces  manufacturers,  no 
matter  what  their  inclination  may  be,  to  adopt 
the  policy  of  deceit  as  a  matter  of  self-preserva- 
tion. Goods  are  not  made  with  a  single  eye 
to  their  intrinsic  merit  for  wear,  but  for  sale. 
Competition  has  forced  business  far  beyond 
the  conservative  limits  of  the  capital  invested, 
endangering  not  only  the  interests  of  stock- 
holders and  of  investors,  but  of  creditors,  and 
of  whole  districts  dependent  upon  the  success 
of  a  manufacturing  industry.  By  combination 
an  opportunity  is  offered  to  correct  these 
abuses,  and  to  advance  manufacture  to  a  per- 
fection it  has  never  reached.  To  say  that  it 
shall  not  be  availed  of,  is  to  declare  that  this 
development  shall  come  to  an  end;  and  when 
development  ceases,  decay  and  disintegration 
will  have  set  in.  There  is  no  middle  course.  I 
should  prefer  to  see  every  article  that  is  manu- 
factured in  Great  Britain,  France  and  Italy, 
brought  into  this  country  free  of  duty,  than 
that  we  should  assume  to  dictate  what  agencies 
manufacturing  industries  shall  employ  in  their 
development,  so  long  as  they  keep  within  the 
letter  and  spirit  of  that  higher  law  which  says — 
due  regard  being  had  to  the  conditions  of  life— 
that  you  shall  so  use  your  own  as  not  to  injure 
another.  We  cannot  without  the  possibility 
of  universal  disaster,  or  the  certainty  of  wide 
injurious  result,  touch  the  spring  which  is 
moving  so  much  industry. 


COMBINATIONS  AND  CRITICS  n 

The  advantages  of  these  combinations  are 
precisely  the  advantages  which  came  from  the 
original  introduction  of  manufacture  into  this 
country.  No  one  has  classified  them  so  com- 
pletely as  Alexander  Hamilton. 

1 .  The  division  of  labour. 

2.  An  extension  of  the  use  of  machinery. 

3.  Additional  employment  to  classes  of  the  community 
not  ordinarily  in  the  business. 

4.  The   promotion   of  emigration   from   foreign   coun- 
tries. 

5.  The  furnishing  of  greater  scope  for  the  diversity  of 
talents   and   disposition   which   discriminates  such   from 
each  other. 

6.  The  affording  a  more  ample  and  various  field  for 
enterprise. 

7.  The  creating  in  some  instances  a  new,  and  securing 
in  all  a  more  certain  and  steady  demand  for  the  surplus 
product  of  the  soil. 

All  these  advantages  are  equally  characteris- 
tic of  these  combinations. 

And  now  what  are  the  alleged  disadvantages 
of  these  combinations?  Among  other  things 
it  is  claimed  that  they  result  in  monopolies. 

This  objection  is  wholly  imaginary.  We 
have,  under  our  laws,  no  monopoly,  as  the 
word  is  properly  to  be  understood.  We  have 
quasi  monopolies;  that  is,  monopolies  not  by 
the  terms  of  the  grant,  but  by  reason  of  the 
thing  granted.  Every  grant  to  a  railroad 
company,  particularly  to  a  horse-car  railroad 
company,  to  a  turnpike  company,  to  a  gas 
company,  to  a  telegraph  or  telephone  company, 


12  THE  TRUST:    ITS  BOOK 

is,  in  a  sense,  a  monopoly.  Monopolies  to 
manufacture  and  trade  have  survived,  to  an 
extent,  in  the  grant  made  by  the  Government 
under  patents.  These  are  really  monopolies 
for  a  limited  period,  though  they  are  justified 
by  the  advantage  to  the  public  resulting  from 
the  disclosure  of  a  secret,  after  the  exclusive 
enjoyment  by  the  patentee.  A  premium  is 
put  upon  invention  for  the  common  good,  the 
full  benefit  of  which  is  only  postponed.  In  no 
sense,  real  or  apparent,  are  these  combinations 
monopolies. 

But  the  claim  is  made  that  they  have  all  the 
inherent  objections  of  monopolies;  that  they 
bring  about  all  their  evils,  which,  a  legal  friend 
has  pointed  out  to  me,  were  set  forth  in  an 
early  English  legislation  to  be:  "  (i)  The  rais- 
ing of  prices;  (2)  the  commodity  will  not  be  so 
good;  (3)  the  impoverishing  of  the  poor  artifi- 
cers. " 

I  deny  that  such  results  flow  from  these 
combinations.  Precisely  similar  objections 
were  made  to  the  introduction,  as  are  now  di- 
rected against  the  extension,  of  manufacturing 
industry.  Hamilton  has  answered  the  original 
as  I  would  have  the  present  objections  answered, 
by  an  appeal  to  experience. 

Said  he: 

"There  remains  to  be  noticed  an  objection  to  the  en- 
couragement of  manufactures,  of  a  nature  different  from 
those  which  question  the  probability  of  success.  This 
is  derived  from  its  supposed  tendency  to  give  a  monopoly 


COMBINATIONS  AND  CRITICS  13 

of  advantages  to  particular  classes,  at  the  expense  of  the 
rest  of  the  community,  who,  it  is  affirmed,  would  be  able 
to  procure  the  requisite  supplies  of  manufactured  articles 
on  better  terms  from  foreigners  than  from  our  own 
citizens;  and  who,  it  is  alleged,  are  reduced  to  the  necessity 
of  paying  an  enhanced  price  for  whatever  they  want,  by 
every  measure  which  obstructs  the  free  competition  of 
foreign  commodities. 

"It  is  not  an  unreasonable  supposition,  that  measures 
which  serve  to  abridge  the  free  competition  of  foreign 
articles  have  a  tendency  to  occasion  an  enhancement  of 
prices;  and  it  is  not  to  be  denied  that  such  is  the  effeet, 
in  a  number  of  cases;  but  the  fact  does  not  uniformly 
correspond  with  the  theory.  A  reduction  of  prices  has, 
in  several  instances,  immediately  succeeded  the  estab- 
lishment of  a  domestic  manufacture.  Whether  it  be 
that  foreign  manufacturers  endeavour  to  supplant,  by 
underselling,  our  own,  or  whatever  else  be  the  cause,  the 
effect  has  been  such  as  is  stated,  and  the  reverse  of  what 
might  have  been  expected, 

"But,  though  it  were  true  that  the  immediate  and 
certain  effect  of  regulations  controlling  the  competition  of 
foreign  with  domestic  fabrics,  was  an  increase  of  price, 
it  is  universally  true  that  the  contrary  is  the  effect  with  every 
successful  manufacture. " 

I  deny  that  these  combinations  find  it  to 
their  interest  to  charge  higher  prices  for  their 
products.  Let  me  give  an  illustration  drawn 
from  my  own  experience. 

The  control  of  a  company  in  which  I  am  still 
interested,  which  manufactures  an  article  in 
general  use,  was  purchased  by  persons  inter- 
ested in  the  Standard  Oil  Company,  and  three 
of  its  Executive  Committee  entered  the  Board 
of  Directors.  I  was  much  interested  to  see 
what  policy  they  would  pursue  in  the  conduct 


14  THE  TRUST:    ITS  BOOK 

of  the  business.  We  had  been  depending  on 
the  protection  of  trade-marks  and  patents, 
and  had  been  selling  our  goods  at  a  correspond- 
ingly high  figure.  To  the  surprise  of  some  of 
my  former  associates,  the  policy  of  the  com- 
mittee was  to  reduce  the  price  thirty  per  cent. 
The  profits  dropped  from  eighty  per  cent,  on 
the  original  cash  investment,  to  less  than  ten 
per  cent.  But  owing  to  the  improvement  of 
the  article  and  its  cheapness,  the  consumption 
was  doubled.  The  manufacturing  facilities 
were  correspondingly  enlarged  and  improved; 
and  although  little  or  no  money  was  made  at 
first,  at  the  end  of  two  years  the  business  so 
increased  that  the  profits  were  not  only  larger 
than  before,  but  the  business  was  put  upon  a 
basis  to  insure  its  continued  and  permanent 
success.  Its  good-will  lay  thereafter,  not  in 
the  monopoly  which  patents  and  trade-marks 
had  insured  to  it  under  the  law,  but  in  the 
monopoly  which  comes  through  the  sale  of  the 
best  article  at  the  smallest  possible  cost.  The 
consumers  and  the  shareholders  were  in  the 
end  equally  benefited.  Let  me  give  another 
illustration. 

The  Legislature  of  the  State  of  New  York 
passed  a  bill  reducing  the  fares  of  the  Man- 
hattan Railway  Company  from  ten  cents  to 
five  cents.  Governor  Cleveland  vetoed  the 
bill.  I  wish  to  call  your  attention  to  his  mes- 
sage, and  to  the  subsequent  course  of  the  Rail- 
way Company,  for  they  illustrate  how  invested 


COMBINATIONS  AND  CRITICS  15 

capital  should  be  treated,  and  the  intelligent 
appreciation  by  a  corporation  of  its  best  in- 
terests. Said  Mr.  Cleveland: — 

"It  is  manifestly  important  that  invested  capital 
should  be  protected,  and  that  its  necessity  and  usefulness 
in  the  development  of  enterprises  valuable  to  the  people 
should  be  recognized  by  conservative  conduct  on  the 
part  of  the  State  government. 

"But  we  have  specially  in  our  keeping  the  honour  and 
good  faith  of  a  great  State,  and  we  should  see  to  it  that 
no  suspicion  attaches,  through  any  act  of  ours,  to  the 
fair  fame  of  the  Commonwealth.  The  State  should  not 
only  be  strictly  just,  but  scrupulously  fair,  and  in  its 
relations  to  the  citizen  every  legal  and  moral  obligation 
should  be  recognized.  This  can  only  be  done  by  legislating 
without  vindictiveness  or  prejudice,  and  with  a  firm 
determination  to  deal  justly  and  fairly  with  those  from 
whom  we  exact  obedience. 

"  I  am  not  unmindful  of  the  fact  that  this  bill  originated 
in  response  to  the  demand  of  a  large  portion  of  the  people  of 
New  York  for  cheaper  rates  of  fare  between  their  places 
of  employment  and  their  homes,  and  I  realize  fully  the 
desirability  of  securing  to  them  all  the  privileges  possible; 
but  the  experience  of  other  States  teaches  that  we  must 
keep  within  the  limits  of  law  and  good  faith,  lest  in  the 
end  we  bring  upon  the  very  people  whom  we  seek  to 
benefit  and  protect,  a  hardship  which  must  surely  follow 
when  these  limits  are  ignored. " 

Now  mark  the  result.  The  Manhattan 
Railway  Company  occupied,  in  the  City  of  New 
York,  the  only  streets  available  for  rapid  transit. 
It  feared  no  competitor.  It  was  not  menaced 
by  legislation.  And  although  it  continued  to 
charge,  for  a  short  time,  ten  cent  fares,  it  after- 
wards voluntarily  reduced  its  fares  to  five  cents ; 


16  THE  TRUST:     ITS  BOOK 

not  on  account  of  coercion,  nor  because  it 
feared  a  rival ;  for  coercion  had  been  unsuccess- 
ful, and  rivalry  there  could  be  none;  but  vol- 
untarily, because  it  knew  that  this  was  the 
best  way  to  serve  not  only  the  community, 
but  its  own  interests.  And  notwithstanding 
the  reduction,  the  income  of  the  Manhattan 
Railway  Company  was  larger  than  ever  be- 
fore. What  is  true  of  this  company  can  be 
said  of  many  other  corporate  institutions. 

Has  any  one  been  injured  by  the  consolida- 
tion of  gas  and  electric  light  companies? 
There  is  scarcely  a  large  city  in  the  Union  to-day 
which  has  not  a  large  consolidated  street  rail- 
way or  gas  company.  Do  you  have  occasion, 
more  than  formerly,  to  complain  of  their  rates 
or  operation?  Has  the  telegraph  service  been 
any  less  efficient  since  the  Western  Union 
Telegraph  Company  absorbed  its  rivals  ? 

It  is  theorizing,  which  experience  shows  to 
be  incorrect,  to  say  that  these  large  corporations 
find  it  to  their  interest  to  raise  prices,  any  more 
than  that  they  fall  short  of  that  high  character 
of  service  which  ensures  public  support.  Prices 
may  be  fixed  somewhat  higher  than  the  "war" 
prices  prevailing  during  ruinous  cut-throat 
competition,  but  the  average  price  is  lowered. 

If  a  combination  in  the  possession  of  a  large 
portion  of  a  field  does  raise  prices,  the  result 
inevitably  follows  that  it  invites  against  itself 
that  destructive  competition  which  originally 
made  the  combination  necessary.  It  may  be 


COMBINATIONS  AND  CRITICS  17 

that  some  combinations  will  act  thus  unwisely ; 
but  generally  they  are  in  the  hands  of  people 
above  such  folly;  and,  if  not  above  it,  the 
management  must  be  changed  and  another 
policy  adopted,  or  disaster  is  sure.  If,  how- 
ever, as  is  unlikely,  these  combinations  de- 
liberately use  their  power  to  enhance  prices, 
and  from  ill-will  and  malevolence  injure  rivals 
and  crush  competition,  then  the  tariff  should 
be  reduced  and  the  conditions  for  such  abuse 
be  abated. 

Again,  it  is  said,  that  such  combinations, 
like  real  monopolies,  cheapen  the  quality  of 
the  product.  Again  I  appeal  from  theoretic 
deduction  to  actual  experience.  Such  com- 
binations have  or  fear  competition;  or,  if  this 
be  not  so,  they  know  full  well  that  they  are  the 
objects  of  close  scrutiny  and  that  just  as  the  en- 
hancement of  price  invites  competition,  or 
the  finding  by  the  public  of  some  substitute, 
or  the  decrease  of  the  protection  afforded  by 
our  laws,  so  also  the  lowering  of  the  quality 
means,  in  the  end,  less  consumption.  And  in 
these  days  manufacturing  success  depends 
upon  the  largest  production  with  the  smallest 
amount  of  return  consistent  with  investment. 
Large  quick  sales  and  small  profits  is  the  watch- 
word of  these  combinations.  If  you  can  look 
for  nothing  else  from  superior  intelligence,  you 
can  at  least  depend  upon  its  enlightened 
selfishness. 

A  consolidated  gas  company   finding   itself 


1 8  THE  TRUST:     ITS  BOOK 

in  the  temporary  possession  of  a  territory— 
for  it  will  be  temporary  only  if  it  fall  short  of 
its  duty — proceeds  to  do  all  in  its  power  to 
make  that  occupation  permanent.  The  con- 
solidation has  brought  about  reduction  of 
expenses;  the  manufacture  is  carried  on  at  the 
best-located  point — it  is  centralized.  Know- 
ing that  during  good  conduct  it  will  have  a 
reasonably  secure  future,  the  company  re- 
models its  works  and  invites  consumption,  not 
only  by  a  cheaper  but  by  a  better  product;  it 
makes  the  public  indirectly  a  partner  in  the 
new  order  of  things. 

The  New  York  Central  Railway  represents 
the  original  organizations  of  a  dozen  railroads. 
They  have  been  absorbed,  or  they  have  united. 
Is  the  service  less  good,  is  the  fare  higher  than 
before?  Does  it  not,  like  all  common  carriers, 
invite  travel  by  commutation  at  rates  less  than 
those  it  is  authorized  to  charge  by  law  ?  Does 
it  not  do  whatever  lies  in  its  power  to  build  up 
and  make  prosperous  the  locality  through 
which  it  runs?  Yes,  and  it  does  this  not  be- 
cause it  fears  competition,  but  because  only 
in  this  way  will  its  prosperity  be  permanent. 

Take  a  railroad  which  has  no  rivals.  In  the 
end  there  is  no  distinction  between  it  and  one 
of  two  competing  systems  as  to  rates  of  fare, 
or  character  of  service  and  equipment.  The 
managers  need  no  such  stimulus  as  competition. 
The  operations  of  common-carriers  almost  in- 
variably show  this.  Ferry  companies,  in  re- 


COMBINATIONS  AND  CRITICS  19 

placing  old  equipment,  secure  it  of  a  higher 
class  than  that  discarded,  though  they  are 
enjoying  a  quasi  monopoly.  Your  oil  is  better 
refined  to-day  than  ever,  and  is  cheaper. 
What  I  have  said  is  true  of  all  industrial  en- 
terprises in  combination.  I  need  not  repeat 
instances.  But  the  reverse  is  nearly  always 
true  of  isolated  competing  concerns.  The 
public  does  not  seem  to  realize  that  the  effort 
of  these  combinations  is  not  so  much  to  divert 
an  existing  demand  as  it  is  to  create  a  new  one. 

On  the  other  hand  a  horde  of  small  concerns 
are  struggling  for  existence.  Our  tariff  legis- 
lation has  manufactured  industrial  enterprises, 
so  rapidly  have  they  risen.  Until  fierce  com- 
petition began  there  were  large  profits.  Then 
as  profits  became  less,  the  inexperienced  mush- 
room-concerns, not  being  able  to  compete 
fairly  and  honestly  with  the  more  capable, 
have  met  this  higher  intelligence  by  deception. 
Goods  have  deteriorated.  They  are  made,  as 
I  have  said  before,  to  sell.  There  has  been  no 
attempt  to  create  new  avenues  of  output  by  a 
better  article,  made  at  lower  cost  with  better 
machinery.  A  shoddy,  flash  article  is  offered 
to  the  public ;  intelligence,  yes,  business  honour 
has  yielded  in  the  struggle.  To-day  the  plant 
of  many  of  these  concerns  is  antiquated ;  and 
with  the  existing  appliances  deceptive  goods 
are  made  with  difficulty  at  a  price  at  which 
with  approved  machinery,  the  best  can  be  pro- 
duced. You  might  as  well  expect  a  man  to 


20  THE  TRUST:    ITS  BOOK 

stop  in  battle  to  make  himself  a  little  more 
presentable  to  the  spectator,  as  to  hope  for 
an  improvement  in  quality  of  product  under 
such  circumstances. 

The  beneficial  results  of  extreme  rivalry  or 
competition  are  very  much  exaggerated  even 
by  highly  intelligent  people.  Let  me  give  an 
illustration  quite  outside  of  industrial  enter- 
prises. 

We  have  in  this  country  hundreds  of  insti- 
tutions of  learning.  England  has  two  or  three 
consolidated  ones,  if  I  may  so  speak.  Do 
we  in  this  country  offer  a  better  opportunity 
for  education  and  culture  than  England?  Do 
we  offer  as  good?  In  the  City  of  New  York 
there  are  several  colleges  and  schools  of  medi- 
cine, and  of  law.  Do  you  suppose  that  the 
graduates  are  better  equipped  as  physicians,  or 
better  educated  lawyers,  because  there  is  more 
than  one  of  these  professional  schools?  I  am 
told  not,  and  my  observation  leads  me  to  agree 
with  what  I  am  told.  It  is  what  I  should  sup- 
pose the  competition  for  precedence,  or  what 
the  public  so  often  confound  with  precedence, 
namely,  popularity,  leads  to — unconsciously 
perhaps,  but  it  leads  there  nevertheless — the 
relaxation  by  faculties  and  councils  of  the  rigour 
of  intellectual  training.  In  the  determination 
not  to  be  the  last  in  the  race  as  to  number  of 
graduates,  each  of  these  institutions  to-day 
distributes  diplomas  to  students  who,  in  one 


COMBINATIONS  AND  CRITICS  21 

great  institution,  might  fail  through  lack  of 
merit  and  acquirements.  What  is  true  of  the 
professional  law  schools  is  true  of  the  schools 
of  academic  instruction.  Do  you  suppose  the 
scholarship  of  England  would  be  higher  to-day 
if  she  maintained  fifty  institutions  of  learning? 
We  do  not  need  argument  to  convince  us  that 
this  would  not  be  so.  We  have  experience  to 
guide  us.  Let  me  draw  one  more  illustration 
from  experience. 

In  the  city  of  London  there  were  a  large  num- 
ber of  competing  gas  companies,  when,  about 
1860,  Parliament  passed  a  law  granting  to  a 
few  companies  what  was  really  a  limited  mo- 
nopoly. I  quote  from  an  English  work  which 
discusses  the  benefits  of  this  legislation : 

"  It  was  long  and  most  strenuously  contended  that  the 
only  means  by  which  cheapness  and  efficiency  could  be 
secured  was  by  competition  between  companies  established 
under  parliamentary  sanctions,  and  that  the  rivalry 
created,  by  having  more  than  one  company  to  supply  the 
same  area,  would  ensure  the  desired  ends.  This  competi- 
tion has  almost  entirely  ceased  to  exist.  It  necessitated 
the  creation  of  two  or  more  capitals  and  the  maintenance 
of  separate  staffs  of  directors  and  other  paid  officials  and 
servants,  besides  duplicating  the  constantly  recurring 
disturbance  of  the  public  thoroughfares,  owing  to  works 
necessary  for  the  laying  and  maintenance  of  pipes  and  other 
machinery  in  connection  with  the  supply.  Instead  of 
economy,  therefore,  it  inevitably  happened  that  neither 
the  companies  nor  the  consumers  were  benefited;  and 
both  gas  and  water  were  supplied  under  the  most  dis- 
advantageous conditions.  The  company  which  could 
carry  on  the  struggle  the  longest  eventually  bought  up 
its  competitor  or  competitors,  and  thus  placed  itself  in 


22  THE  TRUST:    ITS  BOOK 

the  most  favourable  position  to  benefit  others,  at  the 
same  time  securing  its  own  prosperity.  Experience  in 
the  conduct  of  these  companies  has  amply  demonstrated 
the  fact,  that  in  order  to  ensure  prosperity  there  should 
be  no  diversity  of  interest  between  those  serving  and 
served.  Previously  to  the  year  1860  there  existed  in 
London  no  less  than  thirteen  gas  companies,  all  with  large 
capitals,  separate  and  expensive  staffs  of  officers  and 
servants,  and  with  pipes  interlacing  each  other  in  every 
public  thoroughfare.  The  price  of  gas  was  high  and  the 
companies  in  all  cases  realized  but  small  returns  in  the 
way  of  dividends  on  their  respective  capitals.  In  that 
year  a  bill  introduced  to  coerce  these  companies  was 
abandoned  by  its  promoters,  and  subsequently  adopted 
and  carried  through  by  the  gas  companies.  By  the  Act 
of  1860  the  metropolis  was  so  parcelled  out  that  the  Lon- 
don companies  were  enabled  by  agreement  between  them- 
selves to  assign  a  district  for  the  supply  of  gas  to  each 
individual  company.  From  that  moment  commenced 
the  era  of  cheap  gas  supply  and  the  prosperity  of  gas 
companies  within  the  metropolis.  The  principle  of  a 
'regulated  monopoly"  then  and  there  inaugurated  has 
been  so  largely  extended  that  at  the  present  time  the 
whole  of  the  north  side  of  the  metropolis  is  supplied  by 
one  company,  the  largest  in  the  world;  and  the  south  side 
by  two  companies,  almost  as  important  and  equally 
prosperous.  The  experience  of  the  London  gas  com- 
panies has  thoroughly  demonstrated  the  fact  long  in- 
sisted on,  and  long  and  vigorously  disputed,  that  the 
interests  of  gas  suppliers  and  gas  consumers  are  identical. 
When  competition  prevailed  between  the  thirteen  com- 
panies, the  price  of  gas  to  consumers  was  dear  and  the 
dividends  to  shareholders  small.  With  a  practical  mo- 
nopoly, dividends  now  exceed  the  original  limit  of  ten 
per  cent.,  and  the  price  which  was  fixed  by  the  Act  of 
1860,  at  four  shillings  and  sixpence  per  thousand  feet, 
and  which  was  then  charged  to  the  consumer,  is  now  but 
little  more  than  one-half  that  sum." 


COMBINATIONS  AND  CRITICS  23 

London  to-day  has  the  cheapest  gas  in  the 
world,  and  London  gas  companies  earn  a 
higher  rate  of  dividends  than  any  other  gas 
companies  in  the  world.  One  cannot  have  a 
more  forcible  illustration  of  what  experience 
has  to  say  as  to  certain  kinds  of  competition. 

On  the  perfecting  of  the  combinations  I  am 
speaking  of,  fresh  money  is  put  into  the  con- 
solidated treasury,  the  machinery  and  plant  are 
revolutionized  by  being  modernized,  amplified 
and  systematized,  and  expenses  are  reduced. 
Is  this  done  to  enhance  prices? — to  lower 
quality  ?  No !  It  is  to  improve  quality  and 
lessen  cost;  to  create  demand,  not  any  longer 
to  exhaust  energy  in  seeking  to  divert  it ;  and  all 
this  that  the  public  and  the  manufacturer,  the 
consumer  and  producer,  may  have  a  common 
interest  in  the  well-being  of  the  new  order  of 
things. 

Another  disadvantage  which  is  said  to  flow 
from  these  combinations,  is  that  the  corn- 
competing  manufacturer  who  has  not  become 
a  part  of  them,  will  be  injured  in  his  business. 
I  am  free  to  confess  that  this  is  not  an  apparent 
but  in  some  respects  a  real  disadvantage;  but 
it  is  a  disadvantage  which  results  from  an 
inexorable  law  of  our  life.  Every  new  industry 
displaces  or  temporarily  injures  another.  When 
Stevenson,  the  inventor,  was  advocating  the 
application  of  the  steam  engine  to  railroads, 
he  was  gravely  asked  whether  it  would  not  be 
a  bad  thing  if  a  cow  should  get  on  the  track, 


24  THE  TRUST:    ITS  BOOK 

and  Stevenson's  reply  was  "  Yes,  mighty  bad 
for  the  coo. "  But,  though  the  effect  of  these 
combinations  may  be  temporarily  injurious 
to  other  interests  not  united  with  them,  this 
natural  defect  must  not  be  confounded  with 
the  intention  of  bringing  about  such  a  result.  If 
there  is  an  intention  in  the  formation  of  such 
combinations,  of  ruining  the  trade  of  others 
through  personal  malice  or  ill-will,  then  the 
combination  is  not  a  combination  for  trade  or 
manufacture  at  all,  but  a  combination  for 
conspiracy,  and  should  be  dealt  with  by  public 
sentiment  and  by  law  as  all  conspiracies  are 
dealt  with.  A  remedy  is  soon  found  for  such 
flagrant  abuses. 

The  original  legislation  against  combina- 
tions, however,  was  not  directed  against  com- 
binations of  capital,  but  against  combinations 
of  labour.  They  were  the  more  serious  menace 
to  public  security  and  prosperity;  and  it  was 
not  until  early  in  this  century  that  the  rigour 
of  those  laws  was  relaxed.  To-day  trades 
unions  are  not  frowned  upon.  If  organized 
for  due  protection  of  the  interests  of  their 
members  they  are  to  be  applauded.  If  or- 
ganized for  the  purpose  of  destroying  other 
labour  organizations,  or  excluding  non-mem- 
bers from  participation  in  labour,  then  they 
become  combinations  for  conspiracy  and  should 
be  suppressed. 

That  manufacturing  combinations,  even 
when  organized  for  a  proper  purpose,  fre- 


2$ 

quently  result  in  injury  to  others  cannot  be 
denied.  But  for  that  reason  they  are  not  to 
be  visited  with  condemnation.  Said  Lord 
Coleridge,  in  a  celebrated  case: 

"It  must  be  remembered  trade  is  and  must  be  in  a 
sense  selfish;  trade  not  being  infinite,  nor  the  trade  of  a 
particular  place  or  district  being  possibly  very  limited, 
what  one  man  gains  another  man  loses.  In  the  hand-to- 
hand  war  of  commerce  as  in  the  conflicts  of  public  life, 
whether  at  the  bar,  in  parliament,  in  medicine,  in  engin- 
eering (I  give  examples  only)  men  fight  on  without 
thought  of  others,  except  to  excel  or  defeat  them.  Very 
lofty  minds,  like  Sir  Philip  Sydney  with  his  cup  of  water, 
will  not  stoop  to  take  an  advantage  if  he  think  another 
wants  it  more.  Our  age  in  spite  of  high  authority  to 
the  contrary,  is  not  without  its  Sir  Philip  Sydneys.  But 
these  are  the  counsels  of  perfection  which  it  would  be 
silly  indeed  to  make  the  measure  of  the  rough  business 
of  the  world  as  pursued  by  ordinary  men  of  business. " 

It  is  the  survival  of  the  fittest  always,  in 
the  animal  kingdom,  in  business  and  in  the 
professions.  The  struggle  for  pre-eminence  is  a 
constant  and,  at  times,  a  remorseless  one.  To  it 
is  summoned  the  highest  intelligence  as  well  as 
wealth — and  in  such  a  struggle,  intelligence 
counts  for  more  than  wealth. 

The  war  of  competition  has  been  going  on 
even  in  the  agricultural  industry.  The  suc- 
cessful farmer  of  to-day  is  the  tiller  of  a  thou- 
sand acres ;  and  aided  by  cheap  transportation, 
supplies  the  world  with  low  priced  cereals. 
The  small  farmers  of  New  England  and  of 
Europe  cannot  compete  with  him.  New  Eng- 
land farms  have  consequently  been  deserted; 


26  THE  TRUST:    ITS  BOOK 

and  there  has  been  a  serious  decline  in  the 
rents  of  landed  estates  in  Europe.  The  larger 
and  more  intelligent  producer,  whether  in 
agriculture  or  in  manufacture,  has  the  advan- 
tage, and  in  the  end  will  succeed.  When  to  a 
horse-car  railroad  is  applied  electricity  as  a 
motor,  some  suffer.  The  saddlers,  the  harness 
makers,  the  hostlers,  the  stable  attendants, 
may  find  themselves  temporarily  without  oc- 
cupation. For  that  reason  do  we  say  that 
electricity  shall  not  displace  horse-car  railroads  ? 
No ;  because  the  public  is  to  be  considered,  and 
the  public  has  a  larger  interest  in  this  question 
than  have  the  few  labourers  whose  occupation 
for  the  time  being  is  gone.  The  greatest  good 
for  the  greatest  number  is  the  true  philosophy 
of  life. 

The  alleged  disadvantages  of  such  combina- 
tions, in  the  matter  of  the  injury  to  other  in- 
terests, are  largely  theoretical  and  imaginary. 
The  instances  are  very  rare,  where  one  of  these 
combinations  has  acted  intentionally  to  the 
injury  of  another,  and  seldom  has  such  in- 
jury been  the  natural  result  of  their  formation. 

As  I  have  said,  however,  the  manufacturing 
business  has  become  a  very  difficult  business 
to  succeed  in.  It  is  untiring  attention  and 
high  intelligence  that  ensures  success.  If 
you  prohibit  combinations  you  are  not  pro- 
tecting the  weak  and  unskilled ;  you  are  rather 
putting  a  premium  upon  their  destruction. 
For  their  interests  are  considered  in  such 


COMBINATIONS  AND  CRITICS  27 

combinations  as  they  are  invited  to  enter 
upon  reasonable  terms.  But  they  must,  if 
such  combinations  be  prohibited,  sink — first, 
into  insignificance,  and  finally,  into  ruin, 
against  the  high  intelligent  competition  which 
the  law  can  never  restrain.  In  such  event 
this  intelligence  will  control  the  industry, 
not  through  amalgamation  or  consolidation, 
but  through  the  destruction  of  its  competitors. 
I  know  of  instances  of  this  before  such  com- 
binations became  popular  or  frequent.  No 
human  law  can  ever  be  devised  to  prohibit 
the  monopoly  of  superior  intelligence. 

There  are  one  or  two  remaining  objections 
perhaps  worthy  of  notice. 

It  is  said  that  the  independence  of  the 
individual  manufacturer  and  of  the  workman 
is  destroyed  by  becoming  part  of  such  or- 
ganizations. This  objection  should  not  be 
passed  over  lightly,  because,  if  true,  it  is  most 
serious. 

The  advantages  which  come  from  such  com- 
binations are,  in  large  part,  financial  advan- 
tages to  the  producer  and  to  the  consumer ; 
but  if  I  believed  that  these  large  aggregations 
of  intelligence  and  wealth  involved  the  degra- 
dation of  labour,  or  were  in  any  way  inimical 
to  labour,  I  should  not  be  advocating  them, 
nor  should  I  consent  to  be  financially  inter- 
ested in  them;  for  such  undertakings,  however 
well  conceived  or  successful  at  the  outset, 
end  in  disappointment.  Every  sensible  man 


28  THE  TRUST:    ITS  BOOK 

has  the  elevation  of  the  general  public  always 
in  his  mind.  He  knows  that  accompanying 
this  elevation  is  higher  intelligence  and  better 
workmanship,  which  results  in  more  profit 
to  the  capitalist  whose  interests  are  in  the 
manufacturing  business,  and  in  less  outlay 
by  the  consumer.  There  also  come  with  it 
purer  morals,  better  laws,  and  greater  security 
for  money,  whether  it  be  in  the  manufacturing 
business  or  out  of  it. 

Instead  of  spasmodic  growth  and  periodic 
depression,  such  combinations  ensure  con- 
tinued and  fixed  returns,  so  that  the  labourer 
will  earn  not  only  his  livelihood  but  will  be 
able  to  accumulate  something  against  old  age 
and  for  the  benefit  of  his  posterity;  while  the 
capitalist  will,  as  is  his  due,  receive  an  income 
upon  his  investment  which  will  induce  him  to 
continue  to  be  an  employer  of  labour.  Other- 
wise his  investment  will  be  in  securities  un- 
connected with  the  direction  of  labour  or  its 
interests.  He  will  not  fret  himself  concern- 
ing the  annoyances  of  manufacturing  busi- 
ness. He  will  become  but  a  clipper  of  cou- 
pons. 

The  workman  connected  with  these  enter- 
prises, though  he  devotes  himself  to  what 
may  superficially  seem  an  insignificant  part 
of  a  great  establishment,  is  no  less  indepen- 
dent than  was  the  farmer  who  formerly  was 
at  once  spinner  and  weaver,  shoemaker  and 
blacksmith.  He  is  not  less  able  to  deal  with 


COMBINATIONS  AND  CRITICS  29 

questions  which  confront  him  in  life.  He  is 
not  a  slave  of  these  corporations.  His  in- 
come is  more  certain  than  if  he  were  connected 
with  an  isolated  manufacturing  establishment 
of  uncertain  duration  and  success.  He  needs 
no  protection  against  right-minded  aggre- 
gations of  intelligence  and  wealth,  for  they 
consider  it  their  first  interests  to  protect  em- 
ployees. The  trades  unions,  too,  protect  him 
against  wrong-minded  combinations.  He  may 
be  part  of  a  great  machine;  but  the  machine 
is  full  of  good  and  practical  purposes,  and  he 
and  his  fellows  have  their  hand  upon  the 
machinery  that  is  driving  all  this  vast  enter- 
prise. As  they  may  create,  so  they  may 
arrest  progress;  and  there  is  more  danger  to- 
day— and  every  frank  man  is  willing  to  admit 
it — from  an  unwise  combination  on  the  part 
of  labour  than  from  the  aggregation  of  wealth 
and  intelligence  represented  in  these  large 
corporations.. 

The  division  of  labour  in  manufacture,  as 
conducted  in  these  combinations,  makes  per- 
fect work  possible.  The  farmer,  when  he 
was  at  work  at  several  trades  and  industries, 
was  not  as  good  a  workman  as  the  black- 
smith of  to-day,  as  the  spinner  of  to-day,  as 
the  weaver  of  to-day,  or  as  the  shoemaker  of 
to-day.  Nor  is  the  general  workman  in  any 
of  these  industries  so  perfect  in  details  as  the 
man  who  is  now  attending  to  one  department 
of  manufacture.  It  is  a  day  when  men  are 


30  THE  TRUST:    ITS  BOOK 

specialists,  not  only  in  trades,  but  in  profes- 
sions; and  there  is  nothing  ignoble  in  all  this. 
The  bar  has  lost  none  of  its  best  traditions 
because  some  of  its  members  are  specialists. 
No  man  to-day  stands  at  the  head  of  the  legal 
profession  as  an  advocate,  and  as  an  adviser  of 
corporations.  There  are  patent  lawyers,  con- 
veyancers, admiralty  lawyers.  No  one  is  prom- 
inent in  the  medical  profession  as  a  practi- 
tioner of  medicine  and  as  a  surgeon.  Not  only 
have  medicine  and  surgery  been  separated, 
but  again  in  turn  they  have  been  sub-divided ; 
and  if  one  disease  is  to  be  treated,  one  physi- 
cian is  sent  for;  if  one  operation  is  to  be  per- 
formed, one  surgeon  is  sent  for;  if  another, 
another  surgeon  is  preferred.  It  is  so  in 
the  world  of  business,  and  it  is  so  in  the 
manufacturing  industry.  "  Non  multa  sed 
multum"  is  the  motto  of  every  successful 
man. 

There  is  for  every  right-minded  man  some- 
thing ennobling  and  elevating  in  the  recog- 
nition that  he  is  doing  a  thing  completely,  ef- 
fectively, understandingly.  He  has,  too,  an 
incentive  to  be  master  of  its  details,  and  to 
strive  ever  towards  perfect  workmanship; 
because  he  knows  that  these  combinations 
are  prompt  to  recognize  merit,  whether  it  be 
administrative  or  inventive.  He  is  a  part  of 
a  harmonious  whole;  and  realizing  his  true 
relation  to  all  this  moving,  restless  energy,  he 
may  feel  within  himself  the  stimulus  for  greater 


COMBINATIONS  AND  CRITICS  31 

effort,    nobler    aims,    and    the    possibility    of 
higher  achievement. 

"  Round  swings  the  hammer  of  Industry, 

quickly  the  sharp  chisel  rings, 
And  the  heart  of  the  toiler  has  throbbings 

that  stir  not  the  bosom  of  kings. " 

Again,  it  has  been  said  that  there  is  danger 
to  be  apprehended  from  these  large  capitals. 
I  am  not  prepared  to  say  that  this  thought 
is  to  be  wholly  disregarded.  Under  aggrega- 
tions of  large  capitals,  whether  of  individuals 
or  of  corporations,  there  lurks  a  danger;  and 
thoughtful  men  must  be  watchful  of  it.  But 
I  do  not  concede  that  they  have  yet  become 
menacing,  nor  that  the  time  will  come  when 
they  should  be  limited.  The  way  were  easy, 
if  we  wished  to  accomplish  this.  Individual 
fortunes  could  be  taxed  out  of  existence. 
You  might  limit  the  right  of  corporate  hold- 
ings, forbid  their  expansion,  or  restrict  their 
original  organization.  But  we  know  perfectly 
well  that  the  aggregation  of  capital  has  brought 
with  it  more  benefit  to  the  poor  than  to  the 
rich;  and  we  know,  too,  that  the  capital  of 
these  corporations  does  not  compare  with  the 
wealth  of  individuals.  This  is  the  same  old 
attack  in  another  form,  which  has  been  made, 
time  out  of  mind,  upon  corporations.  Daniel 
Webster  once  said: 

"The  attack  upon  rich  and  exclusive  corporations  is 
idle  and  delusive." 


32  THE  TRUST:    ITS  BOOK 

And  again  he  said : 

"We  know  that  corporations  are  only  partnerships 
carried  on  in  a  more  convenient  manner  than  they  could 
be  done  by  indenture:  that  they  are  not  monopolies;  and 
that  it  is  because  of  their  convenience  that  they  are  em- 
ployed. " 

The  same  is  true  of  those  large  corporations 
now  known  as  combinations.  Would  that 
there  were  more  of  such  public  men,  with  his 
insight  and  his  courage ! 

The  demagogue  who  attacks  corporations 
and  combinations  has  his  usefulness,  per- 
haps, in  making  us  more  alive  than  we 
otherwise  might  be  to  the  dangers  which  may 
accompany  accumulations  of  great  capital. 
As  good  citizens  we  must  see  to  it  that  in  our 
effort  to  secure  large  returns  upon  invested 
capital,  no  harm  shall  come  to  the  Common- 
wealth of  which  we  are  members,  or  to  our 
country  which  is  essaying  successfully,  for  the 
first  time  in  the  history  of  the  world,  the 
problem  of  self-government. 

When  this  question  is  discussed  and  re- 
discussed,  as  from  time  to  time  it  must  be,  in 
our  legislative  bodies,  in  the  debating  society, 
in  the  country  store,  and  in  the  home,  do  not 
forget  that  as  advantages  are  relative,  so  also 
are  disadvantages.  There  are,  perhaps,  some 
disadvantages  about  these  organizations. 
Most  of  them  are  imaginary,  or  theoretical; 
but  granted  that  there  are  disadvantages,  we 
are  not  to  judge  an  institution  by  its  short- 
comings alone. 


COMBINATIONS  AND  CRITICS  33 

Judged  in  this  way,  what  would  one  say  of 
the  institution  of  marriage?  It  is  the  butt  of 
the  weekly  punster,  and  too  often  justly  so. 
It  fails  often  to  accomplish  its  higher  mission. 
Yet  would  any  sane  man  suggest,  for  that 
reason,  that  it  be  abolished?  The  progress, 
yes,  the  establishment  of  religion,  has  been 
marked  by  wrongdoing,  by  persecution,  and 
by  bloodshed.  But  for  that  reason  does  any 
man  claim  that  religion  has  failed  of  the 
purpose  of  its  divine  author?  No;  because 
the  test  is  whether,  in  the  long  run,  it  has  made 
for  righteousness.  If  it  has,  then  its  disad- 
vantages, shortcomings  and  its  misdeeds  are 
insignificant  as  compared  with  its  good.  The 
Constitution  of  the  United  States  has  been 
pronounced  to  be  one  of  the  greatest  creations 
of  the  human  intellect.  Yet  lawyers  have 
argued  and  courts  decided,  concerning  its 
meaning ;  and  on  the  construction  of  its  language 
there  developed  one  of  the  fiercest  of  modern 
wars  for  the  maintenance  of  the  Union  it  had 
created.  Has  our  essay  of  republican  gov- 
ernment by  a  written  constitution,  therefore, 
been  a  failure? 

And,  let  me  remind  you  here,  that  the  union 
of  the  two  parts  of  this  country,  split  asunder 
by  this  struggle,  has  only  become  complete 
within  the  past  few  years;  and  the  manufac- 
turing industry  has  done  more  to  bring  about 
that  union  than  any  other  agency.  As  long 
as  the  South  was  a  producer  of  raw  material 


34  THE  TRUST:    ITS  BOOK 

alone  and  the  North  a  manufacturing  section, 
their  interests  lay  apart.  But  when  we  had 
established  manufactures  in  the  South  and 
there  resulted  an  exchange  of  raw  material 
and  manufactured  products,  then  came  the 
time  when,  through  reciprocal  relations,  a 
union  was  created  which  could  never  have 
been  established  by  force  of  arms.  Daniel 
Webster — a  sentinel  as  he  always  was  on  the 
watch  tower  of  our  country  — long  ago  urged 
the  introduction  of  manufacture  into  the  South, 
predicting  that  we  should  thus  cement  a  Union 
between  the  North  and  South,  which,  even  in 
his  day,  was  rapidly  becoming  a  Union  but 
in  name.  He  recommended  as  prevention 
what  we  have  seen  the  effect  of  as  a  cure. 

The  legal  methods  for  organizing  industrial 
combinations  deserve  some  mention;  for  the 
discredit  into  which  some  of  these  combina- 
tions have  come  is  attributable  to  legal  defects 
more  than  to  any  other  cause.  Industrial 
development  is  always  in  advance  of  legal 
machinery.  It  is  only  when  commercial  in- 
terests imperatively  require  them  that  our 
legislatures  provide  new  laws  for  the  new  con- 
ditions. While  we  are  in  advance  of  Europe 
in  the  invention  of  labour-saving  machinery 
and  in  the  higher  development  of  manufactur- 
ing industry,  our  law-makers  are  behind  those 
of  the  Old  World  in  providing  laws  for  the 
larger  aggregation  of  wealth  and  intelligence. 

Nearly  fifty  years  ago  the  English  Parlia- 


COMBINATIONS  AND  CRITICS  35 

ment  recognized  the  right  of  freedom  of  as- 
sociation for  business  purposes.  Restrictive 
statutes  were  repealed,  and  laws  were  passed 
conferring  upon  individuals  the  right  to  as- 
sociate for  business  purposes,  without  restric- 
tions as  to  the  number  of  persons,  the  amount 
of  capital  or  the  nature  of  the  business.  The 
associations  under  those  laws  lie  at  the  very 
foundation  of  England's  prosperity  and  great- 
ness, and  contributed  largely  to  her  long  su- 
premacy as  the  financial  and  commercial  centre 
of  the  world. 

The  legislators  of  the  State  of  New  Jersey 
have  been  in  advance  of  the  legislators  of 
sister  States  in  providing  laws  for  the  organi- 
zation of  industrial  corporations.  The  law- 
makers of  the  State  of  New  York,  however, 
are  beginning  to  see  the  great  loss  to  that 
State  by  the  diversion  of  capital  to  New  Jersey ; 
and  liberal  amendments  have  just  been  en- 
acted by  the  New  York  Legislature  for  the 
formation  of  corporations.  One  of  the  New 
York  legislators,  who  has  closely  studied  this 
question,  states  that,  in  his  opinion,  "It  is  as 
prejudicial  to  business  interests  to  pass  laws 
to  forbid  the  combination  of  capital  as  it 
would  be  to  turn  the  universe  back  three 
hundred  years,  and  pass  laws  forbidding  the 
combination  of  labour.  Laws  should  be  passed 
facilitating  the  combinations  of  effort  and 
means,  whether  these  means  are  the  muscle 
of  the  labourer  or  the  accumulated  wealth  of 


36  THE  TRUST:    ITS  BOOK 

the  capitalist."  Men  high  in  authority  in 
our  national  government,  who  have  given  this 
matter  thoughtful  attention,  consider  that  the 
time  has  come  when  Congress  should  pass  gen- 
eral laws,  free  to  all  citizens  of  the  United 
States,  under  which  large  manufacturing  cor- 
porations may  be  organized. 

One  more  thought  and  I  shall  have  fin- 
ished. There  will  come  a  time  when  the 
protection  now  afforded  to  domestic  manu- 
factures will  be  largely  reduced.  As  at 
present  constituted  they  could  not  survive 
any  considerable  reduction  of  that  protection. 
But  if  we  are  to  have  in  this  country  freer  trade, 
or  absolute  free  trade — which  everyone  recog- 
nizes as  desirable  when  we  are  in  a  position  to 
meet  it — it  can  safely  come  only  when  the  way 
is  prepared  for  it  by  the  superior  development 
of  our  manufacturing  industries.  We  have  seen 
how  cost  can  be  cheapened  through  an  immense 
production  of  an  article  under  one  directing 
head;  and  although  we  are  handicapped  by 
dearer  labour  than  exists  in  the  densely  popu- 
lated countries  of  Europe,  we  have  the  advan- 
tage, which  will  go  on  increasing,  of  the  most 
liberal  consumption  here  at  home  for  the 
greater  part  of  our  manufactured  products. 

If  it  be  denied  that  the  formation  of  these 
combinations  will  help  to  make  possible  freer 
trade,  or  free  trade,  let  me  call  attention  to  the 
significant  fact  that  the  only  industries  which 
have  arisen  above  the  needs  of  protection  are 


COMBINATIONS  AND  CRITICS  37 

those  working  under  the  advantages  of  com- 
bination. The  oldest  and  most  important 
combination  to-day  is  supplying  the  markets 
of  the  world,  exporting  annually  its  products 
to  the  value  of  over  $50,000,000,  not  only  to 
Europe,  but  to  the  cheap-labour  countries  of 
China  and  Japan.  When  the  treaties  of 
reciprocity  were  being  negotiated  with  the 
Spanish-American  States,  the  question  arose 
as  to  the  desirability  of  the  United  States 
asking  for  the  free  admission  or  a  concession 
of  duty  on  petroleum.  The  position  taken 
by  the  eminent  statesman  who  was  directing 
those  negotiations  was  that  we  produced  by 
far  the  cheapest  light  in  the  world,  and  there 
was  no  necessity  of  asking  for  it  any  con- 
cession. 

There  is  ample  crude  petroleum  in  South 
America  and  in  Russia  to  supply  the  wants  of 
the  world,  but  it  is  the  concentration  of  ability 
and  wealth  that  has  put  us  in  a  position  in 
that  industry  to  ask  no  consideration  and  to 
fear  no  rivals.  At  the  same  time,  the  price  of 
oil  has  been  steadily  reduced  along  with  the 
lessened  cost  of  refining  and  the  saving  which 
the  Standard  Oil  Company  has  been  able  to 
make  of  millions  of  dollars  annually  by  manu- 
facturing every  important  article  required  in 
its  business.  If  every  manufacturing  interest 
were  in  that  position  to-day  there  would  be  no 
need  of  a  protective  tariff.  We  could  throw 
open  our  markets  without  fear  or  favour.  In 


38  THE  TRUST:    ITS  BOOK 

my  judgment,  we  can  reach  that  ideal  posi- 
tion by  fostering  this  higher  development  of 
manufacturing  enterprise,  taking  advantage  of 
aggregations  of  wealth,  of  matured  judgment, 
of  experience,  of  executive  ability,  of  inventive 
genius,  of  reduced  cost  through  large  produc- 
tion. This  is  how  to  compete  successfully 
in  manufacture  with  the  whole  world. 


CHAPTER    II 

AGGREGATED  CAPITAL:    ITS  HISTORY 
AND   INFLUENCE 

BY  S.  C.  T.  DODD 

To  study  the  history  of  aggregated  capital 
one  must  begin  at  a  comparatively  recent  date. 
The  ancient  world  knew  little  about  it.  Wealth 
in  the  hands  of  single  individuals  or  families, 
accumulated  to  wonderful  proportions,  but  it 
was  unproductive  wealth.  Business  was  too 
ignoble  for  the  Egyptian,  the  Greek,  the  Roman 
aristocrat.  Plato,  in  his  laws,  ordered  a  citizen 
to  be  punished  if  he  attempted  to  concern 
himself  with  trade.  Augustus  is  said  to  have 
condemned  a  senator  to  death  because  he  so 
degraded  himself  as  to  engage  in  manufacture. 
Rome  obtained  her  wealth  by  plunder,  not  by 
production.  Hence,  these  nations  knew  little 
of  capital  as  we  are  now  to  consider  it — wealth 
used  in  reproducing  wealth;  still  less  did 
they  know  of  aggregated  capital — large  capital 
composed  of  aggregations  of  the  smaller  capitals 
of  persons  associated  in  trade. 

Little  did  that  great  commercial  nation,  Eng- 
land, know  of  aggregated  capital  until  within 
the  last  three  centuries.  Prior  to  that  time 
wealth  was  almost  solely  in  landed  estate,  or 

39 


40  THE  TRUST:    ITS  BOOK 

in  personal  property  used  for  hoarding  or 
display.  Trade  was  considered  unworthy  of 
a  freeman.  The  business  man,  or  shopkeeper, 
is  still  looked  upon  with  contempt  by  the 
English  landed  aristocracy,  a  survival  from 
those  old  days.  Then  there  was  little  de- 
mand for  active  capital  and  none  for  ag- 
gregated capital.  There  were  no  banks  in 
which  small  savings  might  be  placed  for  use 
as  an  aggregated  mass.  Outside  of  farm 
labour  there  were  no  employers  or  employees. 
The  tailor  needed  only  his  goose  and  needles, 
the  tinker  his  pot  and  irons,  the  cobbler  his 
hammer  and  last,  the  farmer  his  plough  and 
spade,  and  the  few  tools  necessary  to  manu- 
facture his  wool,  flax  and  skins,  for  his  own  use. 
Now  all  is  changed.  Individual  labour, 
where  a  man  is  at  once  master  and  man,  is 
almost  unknown,  except  remote  from  the 
great  centres  of  trade.  Labour  is  divided  and 
subdivided,  and  is  carried  on  by  means  of 
costly  machinery  in  great  factories.  Work- 
ingmen  are  hands,  and  are  subject  to  the  direc- 
tions of  superintendents.  The  smoke  of  the 
workshops  and  the  railways  carrying  products 
befoul  the  landscape  and  vex  the  hearts  of 
John  Ruskin  and  his  sentimental  followers; 
trade  strikes  and  riots  are  known;  capital  and 
labour  are,  or  are  said  to  be,  at  enmity.  For 
this  aggregated  capital  is  responsible,  because 
without  aggregated  capital  commerce  and 
manufactures  are  impossible. 


AGGREGATED  CAPITAL  41 

Surely  those  must  have  been  idyllic  days 
before  the  great  change.  The  farmer  ploughed 
his  soil  and  called  no  man  master ;  the  plough- 
boy  went  merrily  whistling  to  his  work  as  the 
sun  rose  above  the  hills ;  the  milk-maid  skipped 
over  the  dewy  fields ;  the  harvest  was  gathered 
home  with  songs  and  rejoicing;  the  villagers 
danced  at  eve  about  the  be-ribboned  May-pole. 
All  was  like  a  scene  in  an  opera  and  just  as  real. 
No  such  days  existed  except  in  the  imagination 
of  poets.  England,  prior  to  the  days  of  the 
introduction  of  machinery  and  her  extensive 
manufactures  and  commerce,  was  a  very  differ- 
ent land  from  that  pictured.  The  mass  of  the 
people  lived  in  abject  poverty.  Their  food 
was  peas,  black  bread,  fern  roots  and  the  bark 
of  trees.  Their  clothing  was  of  leather  or 
their  limbs  were  wrapped  with  wisps  of  straw. 
Their  thatched  huts  were  without  chimneys  or 
glass;  a  hole  in  the  roof  partly  carried  off  the 
smoke  from  the  fire  on  the  mud  floor,  and  the 
fire  had  to  be  covered  at  the  ringing  of  the 
curfew  bell.  Many  of  the  people  were  as 
savage  as  Indians.  Half -naked  women  chanted 
wild  measures,  while  the  men  with  brandished 
clubs  danced  a  war-dance.  One-half  of  the 
families  did  not  know  the  taste  of  fresh  meat, 
and  most  of  the  other  half  had  it  but  once  a 
week.  Roads  were  mere  gullies  filled,  in  wet 
weather,  with  mud,  through  which  travellers 
floundered  on  foot  and  on  horseback.  The 
king  and  court  travelled  in  carts  drawn  by 


42  THE  TRUST:    ITS  BOOK 

oxen.  The  first  carriage  was  introduced  in 
1561.  It  was  deemed  a  sinful  luxury,  and 
was  denounced  as  "  a  temple  in  which  cannibals 
worshipped  the  devil."  The  houses  were 
without  ventilation;  the  floors  were  covered 
with  rushes,  the  bottom  layers  of  which  were 
left  untouched  sometimes  for  twenty  years, 
alive  with  vermin  and  foul  with  unspeakable 
abominations.  The  house  servants  went  about 
naked  or  in  extremely  filthy  garb,  and  slept  on 
the  ground  by  the  fireside  at  night.  Noble- 
men were  destitute  of  comforts  which  are  now 
the  necessities  of  every  workingman.  Clean 
shirts  were  almost  an  unknown  luxury;  the 
coat-sleeve  served  the  purpose  of  a  handker- 
chief. The  purest  country  air  was  fouler  than 
the  air  of  our  city  slums;  the  death-rate  was 
double  that  of  to-day,  and  men  were  old  at 
forty.  The  people  were  as  degraded  mentally 
and  morally  as  physically;  a  majority  of  mem- 
bers of  Parliament  could  neither  read  nor 
write;  religion  consisted  in  reciting  the  cate- 
chism or  in  ecstatic  visions;  the  cart  ever 
creaked  on  its  way  with  victims  to  Tower  Hill 
or  Smithfield  or  Tyburn. 

Such  was  "Merrie  England,"  such  the 
"golden  age"  of  the  past,  to  which  imaginative 
men  would  have  us  return,  and  to  which  we 
will  return  when  we  shall  have  abolished  trade 
combinations  and  the  aggregations  of  capital 
which  alone  render  modern  industry  possible. 

The  great  factors  of  modern  progress  have 


AGGREGATED  CAPITAL  43 

been  associations  of  individuals  and  combina- 
tions of  capital  in  business.  Without  this, 
commerce,  manufactures,  business,  in  the  mod- 
ern sense  of  these  words,  cannot  exist.  While 
England  was  still  in  a  state  of  semi-barbarism, 
other  nations  had  experienced  the  light  of 
civilization,  and  the  path  of  commerce  and 
civilization  was  identical.  In  all  ages  and 
countries  commercial  centres  have  been  the 
centres  of  culture,  arts  and  sciences.  It  is 
only  necessary  to  refer  to  Carthage,  Corinth, 
Athens,  Alexandria,  Palmyra,  Rome.  During 
the  dark  ages  civilization  was  preserved  by 
the  commercial  Arabs,  and  had  its  seat  in  their 
beautiful  cities  in  Arabia,  Africa  and  Spain, 
and  after  the  dark  ages  it  was  restored  to  the 
West  through  commerce.  The  Venetians,  the 
Genoese,  the  Florentines,  and  after  them  the 
Portuguese  and  the  Netherlanders  began  to 
learn  the  powers  of  association  and  of  aggrega- 
tion of  capital.  They  established  banks;  they 
formed  great  combinations  for  trading  pur- 
poses; such  as  in  modern  days  would  be  called 
trusts;  they  sought  for  treasures  in  distant 
lands;  they  covered  all  known  seas  with  their 
commerce.  Trace  the  paths  of  this  trade 
from  the  direction  of  the  rising  to  the  setting 
sun,  through  Venice,  Florence,  Genoa,  the  free 
cities  of  the  Rhine  and  the  Netherlands,  and 
you  trace  the  direct  and  almost  contemporan- 
eous path  of  knowledge,  enlightenment,  arts, 
culture,  comfort,  and  all  that  makes  civilization. 


44  THE  TRUST:    ITS  BOOK 

The  Hanseatic  League,  a  trust  which  em- 
braced not  only  thousands  of  persons,  but 
cities  and  states,  with  capital  without  limit, 
penetrated  the  known  world,  kept  free  the 
paths  of  commerce  from  the  freebooters  which 
preyed  upon  it,  and  redeemed  the  north  of 
Europe  from  barbarism.  The  great  East  In- 
dia trading  companies  not  only  discovered 
America  and  opened  up  the  treasures  of  many 
lands;  they  brought  also  to  Europe  the  arts 
and  learning  of  the  world.  Still  better,  by 
association  of  mind  with  mind,  like  flint  strik- 
ing steel,  mental  fire  was  created,  thought  was 
developed  and  Europe  evolved  a  civilization 
far  in  advance  of  that  of  other  lands. 

It  was  not  until  the  close  of  the  Sixteenth 
Century  that  England  began  to  feel  the  spirit 
and  effects  of  association  of  persons  and  capital, 
and  of  the  extended  commerce  they  made  possi- 
ble. The  defeat  of  the  Armada  and  the  de- 
cadence of  Spain  opened  the  seas  to  English 
merchants.  In  1553  a  great  company  was 
formed  to  trade  with  Russia.  In  1578  Drake 
circumnavigated  the  globe.  In  1600  the  first 
English  East  India  Company  was  formed.  In 
a  few  years  Englishmen  were  buzzing  over  the 
world,  taking  possession  by  their  associated 
companies  of  old  and  new  continents.  The 
American  colonies  were  formed  by  chartered 
corporations  whose  capitals  were  subscribed 
by  English  merchants.  Such  were  the  Vir- 
ginia companies,  the  West  India  Company, 


AGGREGATED  CAPITAL  45 

the  New  England  Company  and  a  host  of 
others.  They  were  mere  trading  companies. 
The  Pilgrim  fathers  tried,  but  could  not  obtain 
a  charter;  their  enterprise,  however,  was  fos- 
tered and  encouraged  by  the  London  Company 
and  the  Plymouth  Company,  which  companies 
had  sent  expeditions  to,  and  had  fully  mapped, 
the  coast  of  New  England  before  the  Pilgrims 
landed.  The  cynic  who  said  the  Pilgrims 
came  here  for  "God  and  gain"  was  truthful, 
but  not  necessarily  reproachful.  The  act  which 
has  God  and  gain  for  its  motive  is  not  likely  to 
be  wrong. 

Almost  contemporaneously  the  condition  of 
England  began  to  improve.  Pavements  were 
laid  in  the  filthy  streets  of  London,  and 
their  darkness  was,  if  not  dispelled,  at  least 
made  visible.  The  smoky  and  unwholesome 
cottages  began  to  give  place  to  houses  of  brick 
and  stone  with  rooms  "  large  and  comelie "  and 
lighted  with  windows.  Stoves  were  intro- 
duced. Men  began  to  experience  the  luxury 
of  being  warm.  Beds  with  bolsters  took  the 
place  of  the  floor  with  logs.  Clean  wood  floors 
and  even  carpets  appeared  instead  of  vermin- 
infested  and  filthy  rushes.  Shirts  began  to 
be  worn  and  even  washed;  and  handkerchiefs 
usurped  the  place  of  the  coat  sleeve.  It  was 
the  inevitable  result.  It  is  with  men  as  with 
wind  and  water :  movement  means  life,  stagna- 
tion means  death.  Capital  is  the  force  which 
vitalizes  society. 


46  THE  TRUST:    ITS  BOOK 

But  still  a  new  era  was  to  dawn  for  England. 
Commerce  made  manufactures  necessary  and 
necessity  stimulated  invention.  In  1769  Har- 
greaves  invented  the  spinning  jenny,  and  soon 
after  Watt  invented  the  steam  engine.  Hence- 
forth labour  was  to  be  conducted  less  and  less 
by  the  vital  force  of  man,  more  and  more  by 
the  forces  of  nature  guided  and  governed  by 
man's  intelligence.  The  co-operation  of  many 
men  and  the  aggregation  of  their  small  capitals 
were  necessary  to  erect  factories,  to  purchase 
machinery,  to  organize  labour  and  to  secure 
its  results  by  opening  markets  for  the  exchange 
of  manufactured  products  among  all  peoples. 
This  was  followed  by  the  railway,  for  which 
capital  in  still  large  and  larger  aggregations 
was  required,  and  thus  the  world  was  revolu- 
tionized. 

"England,"  to  use  the  words  of  Daniel 
Webster,  "became  a  power  to  which  Rome, 
even  in  the  height  of  her  glory,  was  not  to  be 
compared — a  power  which  has  dotted  the 
whole  surface  of  the  globe  with  her  possessions 
and  military  posts — whose  morning  drum- 
beat, following  the  sun,  and  keeping  company 
with  the  hours,  circles  the  earth  daily  with  one 
continuous  and  unbroken  strain  of  martial 
airs. "  But  far  better  than  her  military  prowess, 
the  air  that  encircles  the  earth,  and  swings 
with  it  in  its  revolutions,  throbs  through 
all  its  wide  expanse,  and  in  every  moment 
of  its  daily  progress  with  the  roar  and 


AGGREGATED  CAPITAL  47 

clatter  of  machinery  of  the  English-speaking 
people. 

"The  ships  that  pass  between  land  and  land 
are  like  the  shuttles  of  the  loom  weaving  their 
web  of  concord  among  the  nations."  May 
their  good  work  prosper  until  all  nations  shall 
learn  that  their  true  glory  lies  in  work  and  not 
in  war,  and  until  everywhere  the  throb  of 
machinery  shall  replace  the  throb  of  war- 
drums. 

Not  labour  alone,  not  machinery  alone,  but 
labour  made  possible,  and  machinery  con- 
structed, organized  and  moved  by  aggregated 
capital,  has  fertilized  deserts,  dried  up  marshes, 
kept  a  million  spindles  in  motion  and  a  million 
wheels  revolving,  opened  mines,  utilized  coal 
and  metals,  converted  mountain  crags  and 
clay  into  comfortable  dwellings,  filled  the  seas 
with  the  white  sails  of  commerce  and  the  air 
with  the  smoke  of  manufactures,  bound  lands 
together  with  steel  rails,  made  waters  and 
winds  and  lightnings  our  servants,  brought 
man  in  contact  with  man  and  mind  with  mind, 
inspired  thought,  created  civilization,  pene- 
trated the  unseen,  discovered  the  unknown, 
and  made  all  nature  subservient  to  the  human 
race. 

To  stop  co-operation  of  individuals  and 
aggregation  of  capital  would  be  to  arrest  the 
wheels  of  progress — to  stay  the  march  of 
civilization — to  decree  immobility  of  intellect 
and  degradation  of  humantiy.  You  might  as 


48  THE  TRUST:    ITS  BOOK 

well  endeavour  to  stay  the  formation  of  the 
clouds,  the  falling  of  the  rains,  or  the  flowing 
of  the  streams,  as  to  attempt  by  any  means 
or  in  any  manner  to  prevent  organization  of 
industry,  association  of  persons,  and  aggre- 
gation of  capital  to  any  extent  that  the  ever- 
growing trade  of  the  world  may  demand. 

So  far,  you  may  say,  I  have  been  dealing 
in  glittering  generalities.  I  shall  descend  to 
particulars  to  show  how  capital  through 
manufacture  and  commerce  has  benefited 
mankind. 

The  object  of  all  labour  is  to  supply  human 
wants,  and  want  is  the  incentive  to  all  human 
progress.  The  wants  of  the  barbarian  are  few, 
the  wants  of  the  civilized  man  many.  The 
greater  our  wants  the  higher  our  life.  The 
highest  good  will  be  obtained  when  all  the 
reasonable  wants  of  civilized  man  are  supplied 
with  the  least  labour.  Nature  is  able  to  sup- 
ply all  our  wants  without  undue  toil  if  we 
rightly  know  her  laws  and  wisely  utilize  her 
forces.  Rightly  to  know  is  the  province  of 
knowledge.  Rightly  to  utilize  is  the  province 
of  capital.  In  addition  to  the  grosser  material 
wants,  every  human  being  needs,  and  is  en- 
titled to,  time  for  repose,  time  for  recreation, 
time  to  exercise  his  mental  faculties,  time  to 
enjoy  his  home  and  his  family.  This  becomes 
possible  just  in  proportion  as  the  use  of  capital 
and  machinery  makes  work  more  effective, 


AGGREGATED  CAPITAL  49 

and  enables  man  to  produce  most  with  the 
least  labour. 

Homer  says  twelve  women  were  constantly 
employed  grinding  grain  in  the  house  of  Pene- 
lope, probably  one  grinder  to  supply  twenty- 
five  bread-eaters.  Now,  the  labour  of  one 
man,  aided  by  the  force  of  nature  which  is  sup- 
plied by  the  force  of  capital,  produces  flour 
for  4,000  persons. 

But  little  over  a  century  since  the  steam 
spindle  and  loom  were  set  in  operation.  Now 
a  cotton  spinner  effects  the  results  which  were 
obtained  by  the  labour  of  320  men  in  1769. 
One  operator  in  a  cotton  factory  supplies 
the  wants  of  250  men;  in  a  woollen  factory,  of 
300  men;  in  a  shoe  factory,  of  1,000  men.  In 
the  Pyrenees  iron  is  still  produced  as  it  was 
centuries  ago.  One  man  produces  about  thir- 
teen pounds  per  day.  At  a  modern  blast  fur- 
nace the  labour  of  one  man  is  equal  to  the 
production  of  500  pounds  per  day  of  a  far 
better  product. 

A  man  will  carry  sixty-six  pounds  twelve 
miles  per  day  over  bad  roads.  A  horse  will 
carry  440  pounds.  A  locomotive  will  draw  175 
tons  a  greater  distance  in  an  hour  at  a  cost  of 
six-tenths  of  a  cent  per  ton  per  mile. 

But,  it  is  often  asked,  in  what  way  is  the 
workingman  benefited  by  this?  If  a  machine 
does  the  work  of  320  men,  are  not  that  many 
men  thrown  out  of  employment  ? 

The  first  effect  of  machinery  is  to  displace 


50  THE  TRUST:    ITS  BOOK 

labour  and  thus  to  create  temporary  hardship. 
Its  secondary  effect  is  to  create  a  demand  for 
additional  labour,  while  at  the  same  time  it  in- 
creases the  wages  of  labour  and  decreases  the 
price  of  products  upon  which  the  labourer 
subsists.  Labour  multiplies  and  extends  in 
all  directions  in  proportion  as  capital  furnishes 
man  with  the  means  of  labour. 

In  England  before  the  invention  of  the  spin- 
ning jenny  there  were  5,200  spinners  and  2,700 
weavers.  Ten  years  later  there  were  105,000 
spinners  and  247,000  weavers.  In  1833  there 
were  487,000  spinners  and  weavers.  To-day, 
taking  the  collateral  industries  dependent  upon 
the  cotton,  woolen  and  flax  industries,  not  less 
than  2,000,000  persons  are  employed  instead 
of  the  8,000  employed  at  the  time  the  spinners 
and  weavers  broke  the  machines  because  they 
destroyed  the  labour. 

The  railways  displaced  the  freight  waggons 
and  stage-coaches,  and  many  a  Tony  Weller 
lamented  that  honest  industry  was  destroyed. 
Now  the  railways  of  the  United  States  alone 
give  employment  to  an  army  of  750,000  men, 
not  encluding  the  army  engaged  in  the  collateral 
industries,  necessary  to  maintain  the  tracks, 
machinery,  etc.,  nor  the  still  larger  army  en- 
gaged in  the  hundreds  of  industries  which, 
without  railways,  could  not  exist.  Thus  one 
industry  creates  another.  Aggregated  capital 
and  organized  industries  are  synonymous  terms. 
Railroads,  telegraphs,  manufactories,  are  sim- 


AGGREGATED  CAPITAL  51 

ply  utilized  capital  by  which  labour  is  made 
possible  and  effective. 

While  it  is  usually  admitted  that  capital, 
by  building  up  these  wonderful  industries,  has 
enlarged  the  demand  for  labour,  the  assertion 
is  made  and  repeated  that  the  wages  of  the 
labourer  have  not  been  increased  nor  his  con- 
dition improved.  The  capitalist  prospers,  the 
labourer  is  oppressed.  The  rich  become  richer, 
the  poor  poorer. 

The  fact  is  that  in  proportion  to  the  effective- 
ness of  machinery  in  creating  wealth  cheaply, 
the  wages  of  the  labourer  are  increased,  his 
hours  of  labour  are  shortened,  and  the  prices  of 
products  which  he  consumes  lessened.  When- 
ever capital  is  small  we  find  more  labourers 
to  accomplish  a  given  result,  less  effective 
work,  longer  hours,  lower  rates  of  wages, 
higher  cost  of  products. 

In  1800  the  weaver  could  buy  ten  yards  of 
cloth  with  a  week's  wages.  In  1890  he  could 
buy  150  yards  and  work  thirty  hours  less  per 
week. 

Another  fact  speaks  volumes.  In  England 
the  consumption  of  sugar  has  within  the  last 
fifty  years  multiplied  five  times  for  each  person ; 
of  tea,  four  times;  of  butter,  seven  times; 
of  bacon  and  ham,  eleven  times;  and  of  wheat 
flour,  five  times. 

The  last  thirty  years  have  witnessed  a  con- 
centration of  industry  and  a  combination  of 
capital  never  before  dreamed  of.  It  is  the 


52  THE  TRUST:    ITS  BOOK 

natural  and  inevitable  result  of  steam,  the 
railway  and  the  telegraph.  Distant  places 
are  brought  closer  together,  business  is  not 
bounded  by  the  lines  of  the  town,  the  state  or 
the  nation.  The  world  is  the  market,  and 
business  and  capital  in  business  must  be  as 
boundless  as  the  trade. 

In  1830  there  were  in  the  United  States  80 1 
cotton  factories  with  $40,000,000  capital.  In 
1880  there  were  756  factories  with  $208,000,000. 
As  a  result  of  this  concentration,  three  times  as 
many  spindles  were  operated  by  each  labourer, 
the  product  from  each  spindle  was  one-fourth 
greater,  the  product  per  dollar  invested  was 
doubled,  the  consumption  of  cotton  cloth  was 
doubled,  wages  were  doubled,  the  number  of 
persons  employed  more  than  doubled.  The 
labourer  could,  with  his  wages,  buy  five  yards 
of  cloth  in  1880  for  one  in  1830,  and  the  cotton 
manufacturer  is  now  richer  with  his  two  cents 
a  yard  profit  than  he  was  then  with  his  four 
cents  profit.  A  large  trade  with  small  profits 
is  better  for  all  concerned  than  a  small  trade 
with  large  profits. 

In  twenty  separate  branches  of  industry,  in 
which  concentration  of  business  and  aggrega- 
tion of  capital  were  most  manifest,  from  1860 
to  1885,  wages  increased  from  $8.64  to  $9.88 
per  week,  while  the  purchasing  power  of  wages 
in  the  products  thus  manufactured  increased 
from  100  per  cent,  to  150  per  cent.  In  the 
industries  in  which  special  concentration  took 


AGGREGATED  CAPITAL  53 

place  the  increase  of  purchasing  power  of 
wages  has  been  far  the  greatest.  In  railway 
transportation  it  amounts  to  142  per  cent.,  in 
telegraph  283  per  cent.,  in  petroleum  900  per 
cent. 

There  is  no  mistaking  the  fact  that  concen- 
tration is  the  order  of  development;  concen- 
tration of  people  in  large  cities,  concentration 
of  handicrafts  in  large  factories,  concentration 
of  transportation  in  great  railway  systems. 
To  successfully  resist  it  we  must  banish  steam 
and  discharge  electricity  from  human  service. 
Man  is  made  for  co-operation.  Savages  unite 
only  in  war.  Civilized  people  unite  in  work. 
The  evolution  of  association  is  the  evolution 
of  civilization.  Considering  that  this  tendency 
is  inevitable,  is  it  wise  to  resist  it?  Is  it  not 
wise  to  consider  carefully  how  it  may  more 
and  more  be  made  a  power  for  good,  and  less 
and  less  a  power  for  evil  ? 

Contrast  the  countries  where  industries 
are  concentrated,  where  capital  is  greatest, 
and  machinery  most  effective,  with  those 
where  larger  partnerships  and  corporations  are 
almost  unknown,  where  industry  is  not  organ- 
ized and  large  aggregations  of  capital  are  not 
the  rule.  The  condition  of  labour  is  always 
worst  where  capital  is  small.  Business  drifts 
in  old  ruts,  cannot  attempt  new  enterprises; 
manufacturing  is  done  by  hand  or  by  defective 
machinery;  products  are  dearer,  wages  lower, 
a  greater  number  of  labourers  are  idle,  and  their 
general  condition  much  more  deplorable, 


54  THE  TRUST:    ITS  BOOK 

In  Spain  24  per  cent,  of  productive  power 
is  furnished  by  vital  force;  in  Italy,  34  per 
cent.;  in  Portugal,  42  per  cent.;  in  England 
and  America,  4  per  cent.  That  is,  to  accom- 
plish the  same  result,  42  labourers  would  be 
employed  in  Portugal,  34  in  Italy,  24  in  Spain, 
and  4  in  England  or  in  the  United  States. 
The  wages  in  the  United  States  are  nearly  three 
times  higher  than  wages  in  Portugal,  Spain  or 
Italy.  There  are  ten  idle  men  in  Portugal 
to  one  in  the  United  States,  and  the  general 
condition  of  the  working  classes  in  those  conti- 
nental countries  is  beyond  comparison  worse 
than  the  condition  of  our  working  classes. 
The  reason  for  this  is,  that  in  the  countries 
named  confidence  and  security  does  not  exist 
such  as  leads  men  to  entrust  their  interests 
to  others,  and  to  risk  their  wealth  in  trade. 
Aggregations  of  capital  are  not  there  possible 
such  as  are  necessary  to  erect  great  factories, 
to  introduce  the  most  costly  machinery,  and  to 
build  the  necessary  steamships  and  lines  of 
transportation.  In  every  land  wages  are  higher 
and  the  condition  of  the  labourer  best  where 
most  capital  is  employed,  and  that  capital 
most  concentrated.  In  India  capital  amounts 
to  $35  per  head,  and  wages  are  60  cents  per 
week;  in  Russia,  capital  $190  per  head,  of 
which  only  10  per  cent,  is  aggregated  capital, 
wages  $3.50  per  week;  France,  capital  $1,000 
per  head,  of  which  26  per  cent,  is  combined 
in  large  industries,  wages  $5  per  week;  in 


AGGREGATED  CAPITAL  55 

England,  capital  $1,300  per  head,  78  per  cent, 
of  which  is  united  capital,  and  wages  are  $7.74 
per  week. 

It  is  not,  however,  necessary  to  contrast 
old  England  with  modern  England,  nor  Eng- 
land with  other  lands.  There  are  many 
among  us  who  can  by  recollection  contrast 
with  the  present  time  the  days  before  the 
railroads  and  manufactories  had  in  this  coun- 
try drawn  together  large  capitals  and  made 
concentration  necessary.  Our  fathers  worked 
harder,  earned  less,  and  were  deprived  of  com- 
forts which  the  labouring  man  of  to-day  con- 
siders necessary  to  his  existence.  The  luxuries 
of  their  day  are  the  necessities  of  ours.  You 
may  say  our  fathers  were  hardier  and  better 
men  than  their  degenerate  sons.  This  I  deny. 
Men  of  to-day  are  stronger  and  live  longer  than 
their  fathers,  and  they  are  more  righteous, 
even  if  they  have  less  of  that  dogmatic  faith 
and  form  which  with  our  ancestors  passed  for 
religion.  To  admit  otherwise  would  be  to 
admit  that  the  world  has  ceased  to  progress. 

But  it  is  not  necessary  in  proof  of  my  posi- 
tion to  compare  the  past  with  the  present. 
Given  differences  of  place  and  all  times  are 
contemporaneous. 

There  are  over  two  millions  of  people  in  the 
mountains  of  Virginia,  Tennessee  and  North 
Carolina,  living  to-day  as  our  ancestors  lived, 
without  the  benefits  of  capital,  machinery, 
railroads  or  commerce.  They  are  of  good  de- 


56  THE  TRUST:    ITS  BOOK 

scent  and  started  fairly  with  the  other  settlers 
of  America.  They  raise,  card  and  spin  their 
own  wool  and  cotton,  and  wear  homespun 
cloth.  Five  persons  in  ten  hours  convert  five 
pounds  of  cotton  into  cloth  worth  twenty  cents 
a  yard,  making  their  labour  worth  about  twenty 
cents  a  day.  They  are  not  an  idyllic  people; 
even  Charles  Egbert  Craddock  has  failed  to 
make  them  poetical.  As  the  world  has  pro- 
gressed through  the  aid  of  aggregated  capital, 
and  the  improvements  it  renders  possible, 
these  people  have  been  left  behind.  Their 
mountains  are  filled  with  coal  and  other  min- 
erals, their  forests  are  composed  of  valuable 
timber,  but  they  do  not  utilize  them.  The 
laziness,  filthiness,  mental  and  moral  degra- 
dation, all  that  may  be  summed  up  as  "general 
cussedness"  of  these  people  is  proverbial.  To 
send  missionaries  to  them  at  present  is  useless. 
What  they  first  need  is  the  capitalist.  When 
enterprise  and  energy,  backed  by  capital,  shall 
have  aroused  their  dormant  souls,  and  infused 
into  them  new  physical  and  mental  life,  then 
the  missionary  may  follow  and  arouse  them 
to  new  spiritual  life.  In  all  progress  the 
material  is  first,  and  capital — in  these  days 
of  steam  and  machinery,  aggregated  capital — 
is  the  basis  of  material  progress. 

In  this  hurried  sketch  of  the  influence  of 
aggregated  capital  on  the  world's  progress  I 
confess  I  have,  thus  far,  dwelt  upon  the  bright 


AGGREGATED  CAPITAL  57 

side  of  the  picture.  So  great  is  modern  de- 
nunciation of  capital  that  it  is  necessary  to 
recall  the  fact  that  it  has  done  some  good.  All 
that  has  been  said  is  commonplace;  neverthe- 
less many  are  prone  to  forget  even  such  com- 
monplace facts  as  have  been  recalled  to  your 
mind. 

There  is  a  dark  side  to  the  picture,  and  the 
real  lesson  of  this  essay,  if  it  has  any,  will  be 
in  considering  the  more  sombre  colours  and 
finding  some  reason  for  their  existence.  I  have 
spoken  of  the  great  trading  companies  of  two 
or  three  centuries  ago,  and  of  the  vast  results 
accomplished  by  them.  I  could  tell  you  also 
of  evils  which  they  caused,  and  it  would  be  a 
picture  of  injustice,  oppression  and  wrong. 
They  were  monopolies;  that  is,  they  held  a 
grant  from  the  government  for  the  exclusive 
right  of  trading  with  certain  countries.  An 
exclusive  right  granted  by  the  government  is 
what  constitutes  a  monopoly.  Without  such  a 
grant,  no  association  of  men,  no  aggregation 
of  capital,  can  succeed  in  monopolizing  ordinary 
trade.  It  never  has  been  done  and  it  never 
can  be,  except,  possibly,  under  peculiar  cir- 
cumstances which  I  shall  mention  hereafter. 

These  great  trading  companies  were  not  only 
monopolies,  but  the  government  also  con- 
ferred upon  them  political  powers.  They 
governed  the  semi-barbarous  people  with  whom 
they  traded,  and  they  embroiled  their  govern- 
ments in  wars  with  other  nations  which  granted 


58  THE  TRUST:    ITS  BOOK 

like  franchises.  They  became  rapacious  and. 
cruel.  Their  trade  degenerated  into  robbery, 
and  their  commerce  into  piracy.  All  the  wars  of 
Europe,  from  the  peace  of  Utrecht  to  the 
outbreak  of  the  great  Continental  war,  were 
waged  in  behalf  of  these  monopolies  of  com- 
merce. 

Nearly  all  these  monopolies  eventually  failed, 
and  associations  to-day  which  indulge  in  the 
vain  hope  of  monopolizing  trade  may  learn  a 
lesson  from  their  downfall.  Let  me  state  the 
reasons  in  the  words  of  Thorold  Rogers.  ' '  They 
kept  up  prices  and  so  limited  consumption. 
They  strained  every  nerve,  exhausted  their 
credit  in  their  effort  to  keep  by  main  force 
other  traders  out  of  the  field,  experience  prov- 
ing that  the  only  way  one  can  check  competi- 
tion is  by  lowering  prices.  In  the  expectation 
of  getting  one  large  profit  on  each  transaction, 
they  succeeded  in  making  a  small  profit  or  even 
a  loss  on  their  whole  transactions  put  together ; 
for  it  cost  more  to  protect  a  designedly  narrow 
trade  than  it  would  to  establish  and  render 
permanent  an  intentionally  wide  one.  In 
brief,  they  narrowed  their  market  and  so 
narrowed  their  profit. " 

Every  business  association  of  the  present 
day  formed  for  any  other  purpose  than  to  avail 
itself  of  the  economic  benefits  of  association, 
by  means  of  which  it  may  be  enabled  to  lower 
prices  and  to  extend  its  market,  has  experi- 
enced the  truth  of  the  words  just  recited. 


AGGREGATED   CAPITAL  59 

In  those  days  no  corporation  was  formed 
without  exclusive  privileges.  Even  the  smaller 
and  local  business  of  the  country  was  monopol- 
ized by  aid  of  government  grants.  Parliament 
created  franchise  enactments ;  sovereigns  granted 
them  by  patent.  The  right  to  labour  became 
a  privilege  for  which  some  government  favourite 
received  a  royalty.  The  government  inter- 
fered with  the  butcher  at  the  shambles  and 
the  baker  at  the  oven.  The  peasant  could 
not  grind  his  corn  at  his  own  mill,  nor  sharpen 
his  tools  on  his  own  grindstone,  nor  make  his 
cider  at  his  own  press. 

The  government  having  thus  undertaken  to 
farm  out  business,  succeeded,  as  may  be  sup- 
posed, in  utterly  disarranging  it.  To  set  its 
machinery  right  hundreds  of  other  laws  to 
regulate  trade  were  enacted,  each  one  serving 
only  to  intensify  the  trouble.  Laws  regulated 
wages,  they  regulated  prices,  they  interfered 
with  manufactories,  with  markets,  with  ma- 
chinery, with  shops.  Up  to  1820  two  thousand 
laws  had  been  passed  to  regulate  commerce, 
and  each  law  was  an  unmitigated  evil.  Buckle 
has  not  overstated  the  facts  in  saying  that 
"every  European  government  which  has  legis- 
lated respecting  trade  has  acted  as  if  its  main 
object  were  to  suppress  the  trade  and  ruin 
traders.  Instead  of  leaving  the  national  in- 
dustry to  take  its  own  course,  it  has  been 
troubled  by  an  interminable  series  of  regula- 
tions, all  intended  for  its  good,  and  all  inflicting 


60  THE  TRUST:    ITS  BOOK 

serious  harm.  To  such  a  height  has  this  been 
carried  that  the  commercial  reforms  which 
have  distinguished  England  during  the  last 
twenty  years  have  solely  consisted  in  undoing 
their  mischievous  and  intrusive  legislation." 
Business  in  those  days  was,  as  the  socialists 
would  have  it  now,  controlled  by  government, 
and  a  sorry  mess  the  government  made  of  it. 

Is  it  surprising  that  aggregated  capital  did 
not  exert  its  full  influence  for  good,  or  that  it 
has  been  charged  with  evils  that  were  solely 
the  result  of  evil  laws  ?  The  prejudices  against 
corporations  and  capital  existing  to-day  are 
largely  a  survival  from  those  days.  The  fault 
however,  was  neither  in  association  nor  in 
aggregation  of  capital;  it  was  in  the  fact  that 
all  were  not  equally  free  to  avail  themselves 
of  the  advantages  which  these  instrumentalities 
conferred. 

Laws  of  the  most  severe  character  were 
passed  against  associations  unprotected  by 
government  charter,  whether  of  labourers  or 
of  business  men.  It  was  an  offence  for  work- 
ingmen  to  combine  for  any  purpose;  it  was 
made  penal  to  form  partnerships  above  five 
persons  to  engage  in  certain  branches  of  trade. 
It  was  a  crime  punishable  with  death  and  for- 
feitures of  lands  and  goods  to  form  a  joint 
stock  association,  unless  a  special  government 
grant  was  held.  This  infamous  act,  known 
as  the  Bubble  Act,  was  passed  for  the  purpose 
of  protecting  the  monopoly  granted  to  the 


AGGREGATED  CAPITAL  61 

South  Sea  Company  against  competition  by 
voluntary  associations.  It  is  a  fact,  which 
should  be  better  understood,  that  the  struggle 
against  monopoly  was  a  struggle  for  freedom 
of  association  of  persons  and  capital  and  against 
laws  which  impeded  that  freedom.  It  was  a 
battle  not  only  against  exclusive  privileges  of 
trade,  but  also  against  the  exclusive  privilege 
of  combining  for  the  purpose  of  trade. 

These  mischievous  laws  were  not  erased 
from  the  statute  books  of  England  until  1825, 
and  absolute  freedom  of  association  was  not 
granted  until  1844.  There  was  prosperity 
prior  to  that  time,  because  partnerships  and 
associations  were  formed  and  men  put  their 
capitals  together  in  spite  of  the  law  and  all  of 
its  penalties.  Neither  King  nor  Parliament, 
neither  fines  nor  imprisonment,  could  prevent 
the  voluntary  association  and  combination  of 
capital  in  business.  Hundreds  of  such  asso- 
ciations existed,  millions  of  dollars  of  capital 
were  invested.  Had  it  not  been  so,  England's 
great  factories  would  never  have  been  built, 
her  rich  mines  would  never  have  been  opened, 
her  commerce  would  not  have  covered  every 
sea.  For  half  a  century  business  has  been  free 
in  England — the  right  of  association  is  without 
restriction — capital  may  be  aggregated  without 
limit,  and  England's  greatest  era  of  prosperity 
dates  from  the  day  of  her  freedom  from  unwise, 
unjust  and  iniquitous  laws  which  deprived 
both  the  labourer  and  the  man  of  business  of 


62  THE  TRUST:    ITS  BOOK 

natural  liberty  by  impeding  and  restricting 
the  right  to  labour  and  trade,  and  the  right  of 
associating  persons  and  capital  for  the  purpose 
of  labour  and  trade. 

The  settlers  of  this  country  brought  English 
laws  and  prejudices  against  combinations  with 
them;  but  capital  being  limited,  they  were 
forced  to  combine  in  spite  of  their  laws  and 
prejudices.  Partnerships  in  business  were 
common  from  the  earliest  date ;  and  the  legisla- 
tures created  corporations  with  a  free  hand. 
Our  States  were,  however,  surprisingly  slow 
in  ridding  themselves  of  the  monopolistic 
features  of  corporations,  to  wit :  exclusive  privi- 
leges. Always  a  source  of  corruption  and  of 
injustice,  it  is  singular  that  the  States  tolerated 
the  disgrace  for  so  many  years.  Now,  in 
nearly  all  the  States  of  the  Union  the  right 
of  combination  is  unrestricted,  and  no  exclu- 
sive right  or  privilege  can  be  granted.  Three 
or  more  persons  may  form  a  corporation  to 
carry  on  any  lawful  business  by  simply  signing 
and  filing  an  instrument  declaring  their  intent. 
The  number  who  may  combine  and  the  capital 
they  may  employ  is  unlimited. 

The  Federal  government  still  creates  monopo- 
lies by  issuing  patent  rights.  Some  States 
create  others  by  granting  exclusive  privileges; 
some  public  industries,  such  as  gas  and  water 
companies,  and  possibly,  railroads,  are  quasi- 
monopolies,  by  virtue  of  the  nature  of  their 
business.  Combinations  between  such  com- 


AGGREGATED   CAPITAL  63 

panics  and  between  them  and  companies 
owning  minerals,  limited  in  extent,  may  result 
in  something  akin  to  monopoly ;  but  so  long  as 
the  legislatures  claim  and  exercise  the  power 
of  fixing  the  charges  of  these  public  companies 
there  is  far  more  danger  of  legislative  con- 
fiscation than  there  is  of  oppressive  monopoly. 
With  few  exceptions,  trade  is  now  free  to  all, 
and  association  for  the  purpose  of  trade  is 
free  to  all  on  the  same  terms.  More  corpora- 
tions are  created  in  each  of  our  principal  States 
now  in  one  year  than  existed  in  the  civilized 
world  at  the  beginning  of  the  present  century. 
They  have  become  the  greatest  means  of 
State  and  national  prosperity.  They  have 
promoted  industry  and  thrift  in  every  branch 
of  manufacture  and  commerce.  They  utilize 
the  forces  of  nature  for  man's  benefit.  They 
are  the  instruments  of  modern  civilization. 
They  have  lessened  the  prices  of  necessities, 
increased  the  wages  of  labour,  brought  luxur- 
ies to  thousands  of  homes  and  comfort  to 
millions.  We  boast  of  our  laws  which  guaran- 
tee political  and  religious  liberty.  Not  one 
whit  less  in  importance  to  the  individual,  and 
in  their  effect  on  the  general  welfare,  are  our 
laws  guaranteeing  industrial  liberty. 

I  have  said  the  right  of  association  is  free 
in  this  land.  I  should  have  said  it  was  free 
until  within  the  last  four  years.  There  have 
been  lately  placed  in  the  statute  books  of 


64  THE  TRUST:    ITS  BOOK 

twelve  or  more  States  enactments  which,  if 
they  could  be  enforced,  would  make  an  ordinary 
partnership  criminal,  and  in  at  least  six  States 
enactments  which  inflict  the  penalty  of  fine 
and  imprisonment  for  uniting  persons,  skill 
or  acts  for  the  unholy  purpose,  among  others, 
of  reducing — I  am  not  mistaken  in  the  word — 
of  reducing  the  prices  of  commodities.  A 
modern  Federal  law  also  exists  which,  literally 
interpreted,  forbids  business  of  any  magnitude ; 
but  Federal  judges  have  thus  far  found  it 
easier  to  dismiss  proceedings  under  it  than  to 
guess  at  its  real  meaning.  Legislatures  seem 
to  be  vying  with  each  other  in  efforts  to  dis- 
courage the  saving,  accumulating  and  use  of 
capital.  They  undertake  to  fix  the  prices  of 
transportation  and  commodities,  and  propose 
systems  of  taxation  intended  to  rob  the  capi- 
talist while  he  lives  and  his  children  when  he 
is  dead.  We  are  copying  and  intensifying  the 
mistakes  of  our  ancestors  and  the  result  will 
be  the  same.  The  doctrine  of  Karl  Marx,  that 
"capital  is  robbery,"  is  working  like  leaven 
among  the  people,  although  it  is  not  yet  pub- 
licly announced  as  a  principle  which  controls 
legislation. 

The  last  quarter  of  a  century  has  witnessed 
a  concentration  of  business  such  as  the  world 
before  never  knew.  What  is  the  result  ?  Has 
competition  been  destroyed?  On  the  con- 
trary, it  was  never  so  strong.  Effort  impels 
to  effort — combination  begets  combination. 


AGGREGATED  CAPITAL  65 

New  industries  are  built  up — new  markets  are 
opened — new  methods  of  manufacture  are  in- 
vented. It  is  the  law  of  life.  By  each  striving 
to  get  ahead,  all  make  progress. 

Have  prices  been  increased?  On  the  con- 
trary, combination  in  business  and  low  prices 
have  ever  gone  hand  in  hand.  Combination 
has  never  been  so  great  as  in  the  last  twenty-five 
years  and  prices  have  never  ruled  so  low. 

Has  the  individual  been  crushed  out?  To 
some  extent  undoubtedly  as  a  solitary  individual. 
But  he  has  found  a  larger  sphere  for  his  efforts 
through  association  with  other  individuals. 
No  day  has  ever  equalled  to-day  in  business 
opportunities  offered  intelligent  and  industri- 
ous men. 

Has  the  wage-earner  suffered?  On  the  con- 
trary, new  avenues  of  labour  have  been  opened, 
the  demand  for  labour,  particularly  skilled 
labour  has  increased;  wages  are  higher,  the 
cost  of  living  lower  and  the  condition  of  the 
labouring  man  was  never  so  good  as  to-day. 

With  such  a  quarter  of  a  century  of  experi- 
ence of  the  advantage  of  association  in  busi- 
ness behind  us,  the  man  who  still  fears  that 
combination  will  destroy  competition,  pro- 
duce high  prices  and  lessen  wages,  would  have 
feared  a  conflagration  during  Noah's  flood. 

Let  me  refer  more  specifically,  if  you  are 
not  too  tired  of  statistics,  to  the  two  branches 
of  business  in  which  combination  is  to-day 
the  most  effective.  I  learned  from  the  statis- 


66  THE  TRUST:    ITS  BOOK 

tics  of  railways  for  the  year  1890,  prepared 
by  the  Interstate  Commerce  Commissioners, 
that  the  number  of  railway  corporations  in 
the  United  States  is  1,558,  with  a  total  mileage 
of  about  200,000  miles,  of  which  75  companies 
operate  about  65  per  cent.  The  total  capital 
is  about  10,000  millions  of  dollars.  The  total 
gross  revenue  is  nearly  1,052  millions  of  dollars, 
of  which  75  companies  receive  80  per  cent. 
Truly  here  is  a  combination  and  aggregation 
of  capital  undreamed  of  until  modern  days. 
What  is  the  result?  Although  their  gross 
earnings  are  1,052  millions,  their  final  net 
earnings  are  only  102  millions,  of  which  90 
millions  are  distributed  in  dividends.  Of  their 
gross  earnings,  about  230  millions  are  required 
to  pay  interest.  That  is,  about  720  millions 
annually  or  three-fourths  the  gross  income 
goes  for  labour  and  for  materials  into  which 
labour  enters,  while  only  320  millions  goes  to 
capital.  This  expenditure  of  700  millions 
annually  is  what  the  railroads  do  for  the 
labourer  directly.  They  do  still  more  indi- 
rectly by  furnishing  the  means  of  travel  and 
transportation  and  cheapening  the  cost  of 
products.  For  passengers  the  average  revenue 
is  2  and  167  thousandths  cents  per  mile;  the 
actual  cost  of  service  is  i  and  917  one-thou- 
sandths cents  per  mile,  leaving  21-2  mills  pro- 
fit per  mile  for  each  passenger.  The  revenue 
per  ton  of  freight  per  mile  is  941  thousandths 
of  a  cent,  and  the  cost  604  thousandths,  leaving 


AGGREGATED   CAPITAL  67 

a  profit  of  337  thousandths  of  a  cent  per  ton 
per  mile.  The  revenue  per  train  per  mile  is 
$1.65  and  the  cost  $1.05,  leaving  a  profit  of 
60  cents  per  train  per  mile. 

You  will  admit  that  the  effect  of  such  low 
prices  in  cheapening  products  must  be  great, 
and  that  there  is  no  way  of  getting  those 
charges  much  lower  except  by  some  invention 
or  arrangement  which  will  still  further  reduce 
cost  of  service.  The  transportation  by  rail- 
road to-day  costs  some  800  million  dollars 
less  annually  than  the  same  amount  of  trans- 
portation would  have  cost  twenty  years  ago. 
The  flour  and  meat  you  eat  is  brought  from 
west  of  the  Mississippi  River  to  your  city  at  a 
cost  of  transportation  scarcely  more  than  it 
costs  you  to  have  a  carriage  from  the  station 
to  your  door.  Wheat  is  raised  in  Dakota, 
milled  in  Minnesota,  carried  to  Boston  and 
baked  in  the  large  bakeries  at  a  total  cost  of 
three  and  one-half  cents  per  pound  for  bread. 
Yet  poor  bread  baked  in  small  shops,  is  sold 
to  the  poor  at  six  cents  per  pound.  The  cost 
is  nearly  doubled  after  capital  has  done  its 
part.  The  cost  of  railway  service  does  not 
amount  to  one-half  cent  per  pound,  the  cost 
of  retailing  is  five  times  that.  The  railways 
carry  meat  from  Kansas  to  New  York  at  one 
cent  per  pound.  The  added  cost  to  the  con- 
sumer after  it  leaves  the  railway  is  five  to  ten 
times  the  railway  charge.  The  country  is  con- 
vulsed by  a  slight  rise  in  coal,  perhaps  justly 


68  THE  TRUST:    ITS  BOOK 

so.  But  the  poor  of  New  York  who  buy  coal 
in  small  lots  pay  from  100  to  200  per  cent, 
above  wholesale  prices.  The  economy  of  the 
future  will  be  largely  in  the  saving  of  waste  in 
retailing,  which  averages  20  per  cent,  of  the 
price  the  consumer  pays.  Aggregated  capital 
may  be  used  to  advantage  in  that  direction. 

My  other  illustration  is  the  oil  business. 
About  1872  oil  refiners  began  to  combine  to 
save  themselves  from  ruin.  Oil  was  then  sell- 
ing at  23  1-2  cents  per  gallon,  and  refiners 
losing  money.  The  output  was  248,000,000 
gallons.  The  first  great  saving  was  in  trans- 
portation. Crude  oil  is  now  carried  in  pipe 
lines  from  the  wells  to  the  principal  cities  and 
to  the  seaboard.  The  total  length  of  these 
pipe  lines  and  their  feeders  exceeds  25,000 
miles.  These  pipes  deliver  in  New  York  above 
1,250,000  gallons  per  day.  After  being  refined 
it  is  transported  in  bulk  cars  and  bulk  steamers. 
By  means  of  tank  wagons  it  is  delivered  to  re- 
tailers in  the  principal  cities  of  America  and 
Europe,  in  some  cases  is  so  delivered  even  at 
the  customers'  doors.  This  not  only  reduces 
cost  of  transportation  to  its  lowest  point,  but 
largely  eliminates  cost  of  packages,  which  is 
almost  equal  to  cost  of  contents.  The  tanks, 
pipes,  vessels,  cars,  etc.,  of  this  system  have 
cost  over  $50,000,000.  Without  this  aggrega- 
tion of  capital  the  system  was  impossible.  The 
refineries  and  manufactories  of  barrels,  boxes, 
cans,  sulphuric  acid,  glue,  paint,  etc.,  have 


AGGREGATED  CAPITAL  69 

cost  nearly  $50,000,000  more.  The  direct 
result  of  this  aggregation  of  capital  is  that  the 
actual  cost  of  manufacturing  not  only  oils,  but 
all  that  enters  into  the  manufacturing  of  oils, 
has  been  reduced  from  50  to  66  per  cent. 
Ordinary  export  oil  is  sold  to-day  at  less  than 
four  cents  per  gallon,  and  the  total  consump- 
tion of  crude  oil  is  over  thirteen  thousand 
million  gallons  per  year.  The  saving  to  the 
public  on  the  amount  sold  as  compared  with 
the  price  in  1872  is  over  $150,000,000  per  year, 
not  including  the  saving  resulting  from  the 
reduction  in  the  price  of  the  crude  product  in 
consequence  of  its  increased  production. 

The  benefits  of  this  reduction  in  cost  are 
greater  than  the  mere  cheapening  of  the  pro- 
duct. It  is  the  means  of  saving  the  American 
oil  trade.  Russia  can  produce  oil  enough  to 
supply  the  world,  and  its  crude  product  can 
be  supplied  much  cheaper  than  ours.  It 
already  disposes  of  1,200,000,000  gallons  per 
annum.  Were  it  not  for  our  pipe  line  system, 
our  tank  steamer  system,  our  cheap  methods  of 
refining  and  of  manufacturing  all  necessary 
materials,  we  could  not  hold  our  export  trade 
for  a  single  year.  That  export  trade  in  1892 
amounted  to  over  667  million  gallons,  of  the 
value,  at  the  extremely  low  prices  of  that  year, 
of  over  $45,000,000. 

While  careful  economy  is  necessary  to  pro- 
duce these  results,  it  is  found  that  economy 
requires  the  selection  of  intelligent  workmen 


70  THE  TRUST:    ITS  BOOK 

and  the  payment  of  good  wages,  by  which 
alone  can  good  work  be  secured.  The  best 
machinery  is  of  little  use  without  human  in- 
telligence, skill,  care  and  faithfulness,  and 
large  industries  find  that  these  are  qualities 
they  can  afford  to  pay  for.  The  wages  paid  in 
the  petroleum  industry  are  from  15  to  20  per 
cent,  above  the  average,  and  this  is  not  the 
least  of  the  reasons  why  the  product  can  be 
made  so  cheaply.  Economists  who  believe  in 
the  "wage  fund"  theory  should  make  a  note 
of  this  fact. 

Every  employe  has  also  a  chance  to  im- 
prove his  condition.  To  a  great  extent  the 
managers,  superintendents  and  others  on  high 
salaries  are  chosen  from  the  ordinary  workmen. 
There  is  scarcely  a  man  connected  with  the  in- 
stitution from  the  president  down  who  did  not 
begin  as  a  clerk  or  workingman. 

It  is  a  matter  worth  noting  that  in  any  joint 
stock  industry,  employes  have  the  privilege, 
of  which  they  avail  themselves  largely,  of  be- 
coming shareholders  interested  in  the  profits. 
Thousands  become  thus  interested  who  could 
have  no  hope  of  carrying  on  business  for  them- 
selves, or  of  becoming  members  of  a  partner- 
ship. Employes  are  thus  stimulated  to  greater 
diligence,  care  and  interest  in  the  work.  Strikes 
are  not  known  in  establishments  carried  on  in 
this  manner. 

I  know  that  there  are  persons  in  this  audi- 
ence who  want  to  get  up  and  "jaw  back." 


AGGREGATED  CAPITAL  71 

They  want  to  ask,  why  is  it,  if  all  you  have 
said  is  true,  that  there  are  still  thousands  of 
poor,  thousands  out  of  employment?  Why 
is  it  that  the  centres  of  commerce  and  of  manu- 
factures are  also  centres  of  pauperism  and 
misery?  Why  is  it  that  while  the  capitalist 
lives  in  his  palace,  workmen  herd  in  slums  and 
hovels?  Has  aggregated  capital  banished 
suffering  and  want?  Has  it  given  to  every 
man  a  fair  chance  or  even  a  hope  in  life? 

I  wish  I  could  answer  these  questions  satis- 
factorily. My  object  has  been  to  show  what 
capital  has  done  and  what  it  is  capable  of 
doing,  not  to  claim  that  it  can  cure  all  the 
evils  and  inequalities  of  life.  Neither  do  I 
claim  that  it  has  not  left  much  undone.  I 
assert  that  capital  is  a  necessary  factor  in  all 
the  progress  we  have  made,  and  that,  just  in 
proportion  as  capital  is  aggregated  and  business 
concentrated,  more  labour  is  demanded,  greater 
wealth  is  produced,  wages  are  increased  and 
prices  are  diminished.  I  have  tried  to  show 
by  history  the  untruthfulness  of  the  utterance 
of  Karl  Marx  that  "capital  is  the  spoliation  of 
labour,"  of  Proudhom  that  "all  property  is 
theft,"  and  of  Henry  George  that  "nature 
gives  property  to  labour,  and  to  nothing  but 
labour."  I  hope  I  have  shown  that  it  is  not 
true  in  countries  which  have  grown  rich  by 
production  and  not  by  plunder  that  as  the 
"rich  become  richer,  the  poor  become  poorer, " 
"that  wealth  accumulates  while  men  decay." 


72  THE  TRUST:    ITS  BOOK 

It  is  a  fair  inference  from  what  has  been  said 
that  to  be  rich  is  not  necessarily  a  crime,  that 
poverty  is  not  in  itself  a  virtue,  and  that  there 
may  be  at  least  one  road  to  Heaven  which  does 
not  lead  through  the  poorhouse. 

Why  is  there  still  so  much  poverty?  One 
reason  is  because  nature  or  the  devil  has  made 
some  men  weak  and  imbecile  and  others  lazy 
and  worthless,  and  neither  man  nor  God  can 
do  much  for  one  who  will  do  nothing  for  him- 
self. If  people  are  content  to  live  in  dirty 
tenement  houses  or  miners'  shanties — to  supply 
with  alcohol  the  want  of  good  food  and  proper 
clothing — to  leave  their  children  uneducated 
and  their  daughters  to  find  amusement  in  dance- 
houses;  if  they  are  content,  or  even  consent, 
to  work  for  barely  sufficient  to  supply  them 
with  barbarous  needs,  they  will  find  the  work 
and  the  wages  suited  to  their  wants.  If  em- 
ployers are  willing  to  deceive  the  public  with 
shoddy  productions  and  defective  work,  they 
will  also  find  the  poor  and  cheap  workmen 
they  want.  But  as  capital  is  aggregated  in 
larger  sums  this  evil  will  decrease.  When 
millions  are  risked  in  a  business  this  kind  of 
work  will  not  do.  To  make  a  business  perma- 
nently successful  there  must  be  good  work, 
good  wages  and  good  workmen — men  of  brains 
who  will  not  strike  at  the  dictation  of  a  walking 
boss  nor  poison  the  food  of  the  so-called  scab 
who  is  willing  to  do  honest  labour.  And  as 
concentration  of  capital  goes  on  there  will  be 


AGGREGATED  CAPITAL  73 

more  and  more  demand  for  such  workmen, 
while  the  idler,  the  bungler,  the  vicious,  the 
saloon  soaker,  all  who  have  "yearnings  for 
equal  division  of  unequal  earnings,"  and  who 
curse  capital  and  the  men  who  have  earned 
and  saved  it,  will  be  less  and  less  in  demand 
and  will  sink  lower  and  lower  in  the  social  and 
moral  scale. 

It  is  true  .that  our  great  commercial  and 
manufacturing  centres  are  centres  of  poverty 
as  well  as  of  wealth — of  all  that  is  bad  as  well 
as  of  all  that  is  good.  Here,  however,  is  a 
fact  worth  noting.  Seventy-five  per  cent,  of 
the  labouring  classes  of  our  great  cities  are 
foreigners,  not  from  the  factories  and  work- 
shops of  England,  but  from  the  Continent; 
from  countries  where  labour  is  largely  manual 
and  individual;  from  lands  where  the  labourer 
is  and  has  been  the  poorest  and  most  degraded ; 
where  wages  are  the  lowest  and  the  methods 
of  living  equally  low.  Poor  as  is  their  condition 
here,  it  is  better  than  it  was  at  home.  Go 
through  our  city  slums  and  you  will  find  that 
the  vilest  and  most  degraded  are  found  at  work 
in  the  sweater  dens  and  other  tenement-house 
industries.  There  is  no  aggregated  capital  in 
Essex  street  or  among  the  Bohemian  cigar- 
makers.  There  the  employer  is  generally  as 
poor  as  the  employes.  The  next  lowest  class 
of  imported  workmen  scatter  through  the 
country  as  agricultural  labourers,  the  poorest 
paid,  possibly,  of  all  labour,  and  this  because 


74  THE  TRUST:    ITS  BOOK 

farmers'  profits  are  small.  The  farmer  cannot 
avail  himself  of  the  benefits  of  association  and 
aggregated  capital,  and  he  suffers  accordingly. 
The  condition  of  labourers  at  our  mines  is 
shamefully  bad.  This  is  largely  a  kind  of 
labour  in  which  the  best  workmen  will  not 
engage.  In  many  manufacturing  towns  also 
the  condition  of  workmen  is  a  reproach  to 
civilization.  But  it  is  generally  worst  in  the 
small  factories.  Small  capital,  business  done 
on  credit  and  high  interest  make  low  wages, 
low  workmen  and  bad  work.  Just  in  propor- 
tion as  industry  is  rightly  organized,  the  neces- 
sary capital  invested,  and  a  large  trade  sought 
for  by  means  of  intelligence,  economy  and 
small  profits,  will  this  condition  of  affairs  be 
improved.  So  far  from  aggregated  capital 
bearing  the  blame  for  these  evils,  it  is  the 
remedy. 

I  admit  that  aggregated  capital  has  not 
cured  and  cannot  cure  all  the  misery  and  in- 
equalities of  life.  Will  you  tell  me  what  can? 
Will  putting  all  industry  into  the  hands  of  the 
government  do  it?  What,  then,  will  become, 
I  will  not  say  of  the  industries,  but  of  the  gov- 
ernment? The  patronage  it  already  dispenses 
tests  its  justice,  if  not  its  strength,  to  the  last 
tension;  what  will  it  be  when  that  patronage 
is  multiplied  a  millionfold?  The  government 
will  then  be  governed  by  a  Tammany  organiza- 
tion on  a  national  scale.  Then  we  would  have 
cause  to  sigh  for  the  good  old  times. 


AGGREGATED   CAPITAL  75 

Will  an  equal  distribution  of  all  the  wealth 
produced,  including  the  rents  of  lands,  cure 
everything?  There  is  not  and  never  has  been 
enough  wealth  produced  in  the  world  to  ma- 
terially better  the  present  condition  of  its  in- 
habitants. There  is  not  enough  wealth  in 
existence  to  meet  the  world's  necessities  for 
two  years.  If  the  rents  of  all  lands  were  dis- 
tributed equally  it  would  not  amount  to 
three  cents  per  day  per  head.  If  the  surplus 
income  of  employers  was  annually  distrib- 
uted among  the  labouring  classes  it  would 
not  appreciably  better  their  condition,  while 
it  would  bring  trade  to  a  standstill  for 
want  of  capital  to  carry  it  on.  Of  the  wealth 
now  produced,  workingmen  get  90  per  cent., 
so  Edward  Atkinson  claims,  and  of  the  10  per 
cent,  saved  and  set  aside  which  becomes  capital 
workingmen  save  and  own  one-half.  It  is  the 
remaining  five  per  cent,  in  a  few  hands  which 
makes  the  millionaires  and  causes  so  much 
apparent  inequality.  The  only  hope  for  a 
better  future  is  in  the  creation  of  a  greater 
amount  of  wealth  by  means  of  the  improved 
use  of  natural  forces,  more  perfect  machinery, 
more  effective  methods  of  manufacture  and 
distribution,  greater  utilization  of  the  present 
waste  of  time,  labour  and  material,  and  in  the 
aggregations  of  capital  necessary  to  accomplish 
these  results.  Nature  has  enough  in  store 
to  give  all  men  what  they  need  when  once  man 
fully  understands  her  powers  and  resources, 


76  THE  TRUST:    ITS  BOOK 

and  has  command  of  the  capital  necessary  to 
utilize  them.  There  is  enough  now  produced 
to  give  every  individual  a  decent  living  who 
does  not  already  enjoy  that  luxury,  provided 
all  waste  was  stopped,  and  much  of  the  waste 
and  useless  expense  of  trade  can  be  stopped  by 
concentration  of  industries. 

It  is  urged  that  aggregated  capital  makes 
some  persons  extremely  rich.  To  this  the  plea 
must  be,  guilty.  But  what  harm  is  done  if  A, 
B  and  C  do  become  extremely  rich,  provided 
they  grow  rich  not  by  plunder,  not  by  specula- 
tion, not  by  stock  manipulation,  not  by  corpora- 
tion wrecking,  or  the  other  forms  of  robbery 
mis-called  business,  but  by  organizing  and 
carrying  on  industries  ?  They  create  the  wealth 
which  makes  them  rich  and  get  but  a  small 
part  of  it.  If  the  eighty  million  dollars  ac- 
cumulated by  Jay  Gould  was  acquired  by 
railway  construction,  and  not  otherwise,  he 
benefited  the  public  while  he  enriched  him- 
self. If  it  should  now  be  divided  among  the 
labourers  of  this  country,  in  one  year  that 
enormous  capital  with  all  its  possible  benefits 
would  vanish  like  the  morning  mists.  Should 
it,  however,  be  used  in  increasing  and  cheap- 
ening transportation,  or  in  increasing  and 
cheapening  production,  it  would  continue  to 
benefit  the  public  for  all  the  years  it  was  so 
used. 

The  world  has  by  no  means  lost  the  benefits 


AGGREGATED   CAPITAL  77 

of  or  been  injured  by  large  capital  in  individual 
hands.  It  was  the  merchant  prince,  John 
Hancock,  who,  by  his  bold  signature,  first 
pledged  his  life  and  fortune  for  the  independence 
of  his  country.  It  was  the  fortune  of  Robert 
Morris  that  saved  the  liberties  of  this  land  at 
the  expense  of  sending  him  to  a  debtor's  prison. 
Such  fortunes  are  poured  out  by  millions  for 
the  good  of  the  unsuccessful  and  unfortunate. 
They  build  our  hospitals,  our  universities,  our 
colleges,  our  technical  and  art  schools,  our  free 
libraries.  Used  in  this  way,  or  in  carrying  on 
industry,  great  fortunes  are  among  our  great- 
est blessings. 

It  is  also  true  that  combinations  and  aggre- 
gated capital  confer  advantages  and  place  the 
individual  who  works  alone  at  a  disadvantage, 
thus  producing  inequalities.  Perhaps  this  is  to 
be  deplored,  but  if  aggregated  capital  did  not 
give  advantages  there  would  be  no  good  in  it. 
If  the  use  of  steam  did  not  confer  advantages 
it  would  not  be  used.  Admitting,  however, 
that  it  confers  advantages,  by  what  right  will 
you  undertake  to  deprive  anyone  of  its  use? 
Shall  I  be  prevented  from  doing  the  best  I  can, 
and  from  calling  to  my  aid  association,  steam, 
machinery  and  every  other  labour-saving  and 
wealth-producing  appliance,  because  my  neigh- 
bour cannot  or  will  not  avail  himself  of  the 
same  advantages?  How  soon  would  progress 
go  upon  halting  feet  if  this  principle  prevailed  ? 
If  those  who  push  forward  are  held  back  none 


78  THE  TRUST:    ITS  BOOK 

will  go  forward.  Every  advance  hurts  some- 
one, but  thousands  are  helped.  The  spinning 
jenny  destroyed  the  spinning  wheel,  the  power 
loom  the  hand  loom ;  canals  injured  transporta- 
tion by  wagons ;  railroads  injured  canals ;  petro- 
leum injured  the  whale  fishery;  electricity 
supplants  gas.  Always  the  more  perfect  in- 
jures and  supplants  that  which  is  less  perfect, 
and  those  who  are  quickest  to  possess  them- 
selves of  the  better  methods  outstrip  their 
fellows.  Inequalities  are  created  but  progress 
is  gained  by  inequality,  not  by  forced  equality. 
Advantages  and  inequalities  must  be  blamed 
on  old  mother  Nature  as  well  as  on  capital. 
Show  me  a  community  where  all  men  are  on  a 
level,  where  no  man  is  more  successful  than 
another,  no  one  richer  than  another,  and  I  will 
show  you  a  community  stagnant,  idle,  semi- 
barbarous,  and  on  the  verge  of  starvation. 

The  last  objection  I  will  mention  is  that  the 
power  given  by  aggregated  capital  may  be 
abused.  This  no  one  can  deny.  Whatever 
is  capable  of  good  is  capable  of  evil.  Every 
force  may  be  used  for  destruction  as  well  as 
for  production.  Fire  burns,  water  drowns, 
the  air  wrecks  ships  and  cities,  steam  explodes, 
electricity  kills.  Shall  we  abolish  these  forces, 
or  shall  we  control  and  utilize  them?  The 
powers  of  government,  of  law  and  of  the  church 
have  been  abused.  Shall  we  therefore  abolish 
government,  law  and  church?  Religion  has 


AGGREGATED   CAPITAL  79 

been  made  a  cloak  for  vice,  faith  has  at  times 
degenerated  into  bigotry,  charity  is  the  cause 
of  much  of  our  pauperism.  Shall  there, 
therefore,  be  neither  religion,  faith  nor 
charity  ? 

Like  other  forces  of  industry,  association 
and  aggregated  capital  have  done  harm  and 
are  undoubtedly  capable  of  abuse,  but  that 
man  is  blind  to  all  that  history  has  taught, 
and  doubly  blind  to  all  that  reason  is  capable 
of  teaching,  who  claims  that  they  therefore 
should  be  destroyed,  or  their  power  for  good 
limited. 

If  there  is  one  thing  that  history  teaches 
plainly  it  is  that  abuses  are  soonest  reduced  to 
a  minimum  by  permitting,  not  by  restricting, 
industrial  liberty.  Give  all  equal  opportuni- 
ties and  business  will  regulate  itself  on  honour- 
able lines.  I  do  not  prophesy  an  era  of  per- 
fection. The  golden  age  of  the  future  is  a 
mirage  as  the  golden  age  of  the  past  is  a  myth. 
There  will  always  be  beggars  on  our  corners, 
tramps  on  our  roads,  debauchery  in  our  saloons, 
corruption  in  our  politics,  injustice  and  dis- 
honesty in  our  business.  But  men  whose  in- 
tegrity is  such  as  to  permit  them  to  be  en- 
trusted with  the  management  of  large  capital, 
whose  intellectual  grasp  of  principles  and  de- 
tails is  such  as  to  command  with  their  products 
the  markets  of  the  world,  are  those  who  will 
soonest  realize  that  the  policy  which  succeeds 


8o  THE  TRUST:    ITS  BOOK 

is  that  which  accords  fair  treatment  to  all,  be 
they  competitors,  consumers  or  employes; 
that  there  is  nothing  so  sharp  or  shrewd  as 
honour;  that  nothing  wins  like  justice;  that 
the  well-being  of  one  depends  upon  the  well- 
being  of  all. 


CHAPTER    III 


CHARLES  R.   FLINT 

THE  time  is  past  when  it  is  necessary  to 
argue  as  to  the  right  of  existence  of  large  ag- 
gregations of  capital,  for  the  purpose  of  in- 
dustrial development.  Every  great  move- 
ment in  the  world's  progress  has  been  opposed. 
Machinery  has  done  more  to  benefit  labour 
than  all  the  acts  of  reformers  and  governments ; 
yet  originally  the  class  most  benefited  en- 
deavoured to  prevent  its  use.  While  com- 
binations of  wealth,  of  judgment,  of  experi- 
ence and  of  executive  ability  are  now  generally 
recognized  as  a  natural  evolution  in  industrial 
development,  all  reflective  men  appreciate 
that,  as  mistakes  have  been  made  in  the  de- 
velopment of  other  great  institutions,  in  the 
State  and  even  in  the  Church,  so  mistakes 
have  been  and  will  be  made  in  the  organiza- 
tion and  management  of  industrial  enterprises ; 
and  at  this  time,  when  so  many  industrial  cor- 
porations are  being  organized,  it  is  important 
that  we  should  compare  views  in  order  to 
minimize  mistakes. 

Fortunately  the  capitalization  of  most  of 
81 


82  THE  TRUST:    ITS  BOOK 

the  industrial  corporations  which  have  re- 
cently been  formed  has  been  clearly  defined, 
and  has  been  based  principally  upon  the  earn- 
ings for  the  years  during  which  "America 
has  been  wearing  her  old  clothes."  Business 
is  active  to-day  and  promises  to  be  more  so 
to-morrow.  Profits  are  large,  and  for  the 
near  future  must  continue  to  be  so.  Add  to 
this  the  advantages  which  will  accrue  from 
economies  and  other  benefits  secured  by  con- 
solidation, and  statements  of  profit  will  be 
rendered  which  will  have  a  tendency  to  turn 
men's  heads.  The  wise  managers  of  large 
industrial  corporations  will  charge  off  sub- 
stantial amounts  for  depreciation,  and  in- 
crease the  surplus  out  of  the  unusual  profits 
resulting  from  increased  demand  and  de- 
creased cost  of  production. 

In  my  judgment,  the  danger  point  will  be 
reached  when  .new  capitalization  is  created 
based  upon  the  abnormally  large  earnings  of 
this  period  of  prosperity,  and  an  undue  ad- 
vance in  the  quotations  of  existing  securities 
takes  place,  in  consequence  of  unexpectedly 
favourable  statements  of  profits.  The  most 
successful  railroad  companies — combinations 
that  have  stood  the  test  of  time,  the  best  ex- 
amples of  the  advantages  of  aggregated  wealth 
and  intelligence — have  increased  their  reserves 
in  good  times,  so  as  to  be  in  a  position  to  pay 
dividends  in  hard  times. 

At  the  close  of  the  period   of  depression 


THE  GOSPEL  OF  INDUSTRIAL  STEADINESS     83 

from  1873  to  1878,  I  noticed  that,  after  some 
months  of  improvement,  many  conservative 
men  sold  their  securities,  and  the  people  who 
purchased  them  made  money  because  there 
was  continued  prosperity.  After  two  years 
had  elapsed  there  was  a  general  feeling  that 
prosperity  had  become  permanent,  and  the 
men  who  had  shaken  their  heads  when  the 
mercury  in  the  financial  thermometer  was 
only  one-third  of  the  way  up,  departed  from 
their  conservative  policy  when  it  reached  the 
top  and  argued  that  reactions  such  as  had  oc- 
curred in  the  past  could  not  recur;  that  the 
political  system  had  been  perfected;  that  the 
wealth  of  the  country  had  enormously  in- 
creased ;  that  the  conditions  of  business  activity 
were  firmly  established;  that  continuous  eco- 
nomic development  was  inevitable.  And  if 
we  could  recall  the  names  of  those  who  in- 
vested at  that  time  in  the  securities  of  the 
companies  organized  to  parallel  the  New  York 
Central,  we  should  find  in  the  list  the  very 
pillars  of  conservatism.  The  result  reminded 
me  of  the  remark  of  Larry  Jerome  when  the 
guide  pointed  out  the  Coliseum  as  "the 
greatest  ruin  in  the  world."  "He  evidently 
has  never  heard  of  Pacific  Mail,"  said 
Jerome. 

Industrial  corporations,  properly  organized 
and  well  managed,  because  they  can  buy, 
manufacture  and  distribute  more  cheaply  than 
their  weaker  and  less  able  competitors,  have 


84  THE  TRUST:    ITS  BOOK 

an  inevitable  and  a  necessary  advantage  in 
the  world's  markets,  and  are  sure  to  prosper. 
But  I  am  equally  certain  that  there  will  ulti- 
mately be  a  reaction  from  the  present  period 
of  unusual  business  activity.  The  vital  point 
at  this  time  is  to  see  that  industrial  corpora- 
tions are  organized  and  managed  upon  sound 
business  principles,  and  not  to  rush  into  over- 
production and  thus  to  create  the  conditions 
of  inflation  which  result  in  reaction  and  panic. 
What  should  be  preached  is  the  gospel  of 
steadiness.  The  new  corporations  are  large 
enough  and  controllable  enough  to  make  for 
steadiness  in  a  way  that  would  have  been  im- 
possible under  the  old  conditions.  They  can 
in  case  of  need  be  made  the  instruments  of 
economic  safety,  just  as  the  clearing  houses 
have  been  made  the  instruments  of  financial 
stability. 

The  time  when  a  check  will  be  most  needed 
will  be  at  a  later  period,  when  favourable  re- 
turns resulting  from  the  advantages  of  con- 
solidation, added  to  the  profits  made  in  time 
of  great  prosperity,  will  cause  industrial  shares 
to  be  much  more  in  fashion  than  they  are  to- 
day, when  corporations  will  be  looked  upon 
by  the  speculative  public  as  affording  excep- 
tional opportunities  for  stock  market  profits. 
When  we  reach  the  almost  inevitable  period 
of  inflation  and  boom,  the  result  will  be  reac- 
tion ;  and  there  will  be  danger  of  a  crash.  Then 
all  of  us  should  have  in  mind  '93  and  '96, 


THE  GOSPEL  OF  INDUSTRIAL  STEADINESS     85 

when,  to  quote  C.  P.  Huntington,  "Every  man 
who  had  two  shirts  was  in  trouble. " 

In.  the  organization  and  management  of 
industrial  corporations  there  are  certain  dan- 
gers. One  is  the  jeopardizing  at  the  outset 
the  most  valuable  asset  of  an  industrial  con- 
solidation, namely,  the  good-will  of  the  suc- 
cessful companies  included  in  the  consolida- 
tion. Each  company,  by  years  of  honest 
dealing,  has  established  relations  of  confidence 
with  its  customers,  who  are  satisfied  with  its 
methods.  The  danger  comes  when,  upon  the 
completion  of  the  consolidation,  some  en- 
thusiastic member  of  the  newly  formed  execu- 
tive committee,  carried  away  by  the  theories 
of  centralization  and  believing  himself  to  be 
a  Napoleon  of  Industry,  attempts  to  centralize 
the  business  too  rapidly  and  too  dictatorily, 
thereby  destroying  existing  organizations,  in- 
juring the  good-will,  and  endangering  the 
whole.  But  experience  has  proved  that  in 
such  cases  we  can  usually  rely  upon  the  rare 
common  sense  of  the  hard-headed  practical 
men  who  have  built  up  the  industry.  The 
greatest  care  should  be  taken  in  organizing 
new  consolidations  to  retain  the  services  of 
such  men.  In  several  industrial  consolida- 
tions with  which  I  have  been  associated,  I 
have  urged  at  the  beginning  that  the  individu- 
ality and  independence  of  the  successful  con- 
cerns should  be  sustained,  that  the  endeavour 


86  THE  TRUST:    ITS  BOOK 

should  be  to  bring  the  standard  of  all  up  to  that 
of  the  best,  and  not  to  centralize  the  business 
in  such  a  way  as  to  destroy  the  good-will. 

Another  disadvantage:  While  the  financial 
interest  of  the  individual  entrusted  with  the 
local  management  of  a  sub-company  or  plant 
is  as  large  in  amount  as  before,  his  percentage 
of  interest,  owing  to  its  being  merged  with 
other  concerns,  is  very  much  less,  and  the 
inducement  of  exertion  and  economy  is  not 
as  large  as  before.  In  the  export  and  import 
business  we  are  able  clearly  to  divide  our 
business  into  departments,  according  to  coun- 
tries or  staples,  interesting  each  head  in  the 
department  which  he  manages.  Here  the 
departments  are  independent.  But  in  case 
of  the  consolidation  of  manufacturing  cor- 
porations, such  an  arrangement  is  very  diffi- 
cult, as  there  is  likely  to  be  a  conflict  of  interest, 
owing  to  their  interdependence.  It  is  there- 
fore undesirable  to  have  any  individual  inter- 
ested otherwise  than  in  the  common  result. 

An  offset  to  the  disadvantage  of  a  reduced 
percentage  of  personal  interest  is  accounta- 
bility through  accurate  monthly  comparisons 
of  methods  and  results  between  the  several 
plants.  Managers  are  very  ambitious  to  have 
their  work  compare  favourably  with  that  of 
others.  The  manufacturer  thus  has  the  ad- 
vantage of  comparisons  with  co-workers  in 
the  same  line;  every  improvement  is  for  the 
benefit  of  all,  and  manufacture  and  methods 


THE  GOSPEL  OF  INDUSTRIAL  STEADINESS    87 

of  distribution  are  brought  to  the  highest  state 
of  efficiency  and  economy. 

In  studying  the  industrial  situation,  it 
seems  to  me  well  for  us  to  take  advantage  of 
the  experience  of  London,  where  the  capitaliza- 
tion of  manufacturing  concerns  commenced  in 
a  large  way  before  it  was  undertaken  in  the 
United  States.  I  find  that  the  amount  of  the 
capitalization  of  industrials  in  England  has 
aggregated  two  thousand  millions  of  dollars. 
In  many  cases  the  capitalization  has  consisted 
in  putting  in  form  for  investment  private 
businesses,  instead  of  consolidating  many  com- 
panies into  one  large  corporation,  as  has  re- 
cently been  done  in  this  country.  The  two 
thousand  millions  of  English  industrial  securi- 
ties have  been,  as  a  rule,  most  satisfactory 
investments,  and  have  averaged  more  profit- 
ably than  most  others.  Their  failure  has 
been  the  exception. 

In  this  country,  in  addition  to  getting  the 
advantages  of  putting  private  businesses  into 
corporate  form,  we  are  obtaining  the  benefits 
of  consolidated  management.  We  thus  secure 
the  advantages  of  larger  aggregations  of  capital 
and  ability. 

If  I  am  asked  what  these  are,  the  answer  is 
only  difficult  because  the  list  is  so  long.  The 
following  are  the  principal  ones : — raw  material, 
bought  in  large  quantities,  is  secured  at  a  lower 
price;  the  specialization  of  manufacture  on  a 
large  scale,  in  separate  plants,  permits  the 


88  THE  TRUST:    ITS  BOOK 

fullest  utilization  of  special  machinery  and 
processes,  thus  decreasing  cost;  the  standard 
of  quality  is  raised  and  fixed;  the  number  of 
styles  is  reduced,  and  the  best  standards 
adopted ;  those  plants  which  are  best  equipped 
and  most  advantageously  situated  are  run  con- 
tinuously in  preference  to  those  less  favoured, 
in  case  of  local  strikes  or  fires  the  work  goes 
on  elsewhere,  thus  preventing  serious  loss; 
there  is  no  multiplication  of  the  means  of 
distribution — a  better  force  of  salesmen  takes 
the  place  of  a  large  number;  and  the  same  is 
true  of  branch  stores;  terms  and  condition  of 
sales  become  more  uniform,  and  credits  through 
comparisons  are  more  safely  granted;  the 
aggregate  of  stocks  carried  is  greatly  reduced, 
thus  saving  interest,  insurance,  storage  and 
shop-wear;  greater  skill  in  management  ac- 
crues to  the  benefit  of  the  whole,  instead  of  a 
part;  and  large  advantages  are  realized  from 
comparative  accounting  and  comparative  ad- 
ministration. 

Such  are  some  of  the  advantages  of  consoli- 
dation. The  grand  result  is,  a  much  lower 
market  price,  to  the  benefit  of  consumers  both 
at  home  and  abroad,  and  brings  within  their 
reach  classes  and  qualities  of  goods  which 
would  otherwise  be  unobtainable  by  them. 
This  is  the  great  ultimate  advantage;  and  if 
this  were  not  sooner  or  later  true,  if  the  world 
at  large  did  not  ultimately  reap  the  benefit, 
the  other  advantages  would  be  as  nothing. 


THE  GOSPEL  OF  INDUSTRIAL  STEADINESS    89 

The  severest  test  of  a  business  system  is  in 
times  of  adversity.  Under  the  conditions 
which  prevailed  before  these  large  aggrega- 
tions of  wealth  and  intelligence,  each  manu- 
facturer in  times  of  depression  rushed  in  to 
secure  as  much  as  possible  of  the  reduced 
volume  of  business ;  the  result  was  demoraliza- 
tion. 

Under  industrial  combination,  however,  each 
concern  obtains  its  fair  share  of  the  reduced 
volume  of  business  at  fair  prices;  and  the 
contraction  of  business  is  conducted  with  the 
orderliness  of  a  retreat  of  a  well-disciplined 
army.  Nothing  in  the  past  has  more  demoral- 
ized industries  than  over-production  in  times 
of  prosperity,  and  the  scramble  for  a  market 
in  times  of  adversity,  with  resulting  cutting  of 
prices  to  an  extent  necessitating  the  reduction 
of  wages  and  the  manufacture  of  inferior,  I 
might  say,  counterfeit  goods.  Such  competi- 
tion instead  of  being  the  life  of  trade  is  the 
death  of  trade.  It  results  in  failures  among 
jobbers,  manufacturers,  and  suppliers  of  raw 
material,  even  affecting  that  favoured  class, 
the  bankers.  In  the  long  run  the  consumer 
is  unfavourably  affected  by  these  conditions. 
The  goods  he  buys,  though  apparently  cheap, 
are  inferior  in  quality ;  and  he  suffers  as  all  do, 
from  disorganization. 

The  change  from  two  hundred  million  dollars 
excess  of  imports  of  manufactured  goods  in 
1891,  to  sixty  million  dollars  excess  of  exports 


90  THE  TRUST:    ITS  BOOK 

during  the  past  year,  a  difference  of  two  hun- 
dred and  sixty  million  dollars  in  our  favour, 
has  been  principally  owing  to  the  development 
of  economic  manufacture  through  combination. 
Over  eighty  per  cent,  of  our  exports  of  manu- 
factured goods  are  being  produced  by  such 
organizations  while  supplying  the  domestic 
demand,  and,  to  a  very  large  extent,  manu- 
facturing the  implements  and  machinery,  which 
in  spite  of  our  high  wages  has  enabled  our 
farmers  to  take  advantage  of  the  world's 
markets.  The  only  way  in  which  the  United 
States  can  extend  and  hold  its  position  in  the 
world's  markets  for  manufactured  goods  is 
by  securing  the  advantages  of  highly  developed 
special  machinery,  which  is  only  possible 
through  centralized  manufacture  and  aggre- 
gated capital.  Subsidy-seekers  claim  that 
"Trade  follows  the  flag";  merchants  know 
that  trade  follows  the  price,  and  the  flag 
follows  the  trade. 

The  wars  of  to-day  are  industrial  wars; 
wealth  is  secured  by  production  instead  of  by 
plunder;  diplomats  devote  most  of  their  time 
to  studying  trade  conditions  for  the  benefit  of 
their  home  industries;  and  the  most  favoured 
treaties  are  those  of  reciprocity  and  commerce. 
We  might  as  well  expect  to  win  the  industrial 
battles  of  to-day  by  old  methods,  as  to  expect 
victory  with  old  types  of  war  vessels,  manned 
by  men  who,  as  Joe  Jefferson  said,  "Had 
never  had  any  rehearsals,"  against  those 


THE  GOSPEL  OF  INDUSTRIAL  STEADINESS    91 

modern  combinations  of  steel,  electricity,  pow- 
der and  dynamite  handled  by  men  who  have 
rehearsed,  and  directed  by  an  experienced  ex- 
ecutive committee  presided  over  by  an  Admiral 
Dewey. 

In  the  centralization  of  manufacture,  the 
people  at  large  are  receiving  great  benefits, 
not  only  through  lower  prices  for  products,  but 
by  the  opportunities  offered  for  investment 
in  the  shares  of  industrial  corporations.  In- 
comes were  being  seriously  impaired  through 
the  reduction  of  interest,  and  opportunities 
to  invest  in  manufacturing  properties  were 
restricted.  Now  incomes  can  be  increased 
through  judicious  investment  in  industrial 
shares.  In  ten  years  from  now  there  will  be 
fifty  times  as  many  people  interested  in  manu- 
facturing investments  as  there  were  ten  years 
ago.  The  trend  of  the  times  is  centralization 
of  manufacture  and  wide  distribution  of  the 
profits. 

The  wages  of  the  American  workman  can  be 
sustained  only  by  our  keeping  in  the  lead  in 
the  development  of  labour-saving  machinery 
through  centralized  manufacture.  He  must 
be  placed  and  held  in  the  position  of  an  over- 
seer of  machines.  To-day  the  productive 
capacity  of  the  labour-saving  implements  and 
machinery  of  the  United  States  more  than 
equals  that  of  a  population  of  400,000,000  not 
using  labour-saving  devices.  It  requires  the 
intelligence  of  the  American  workman  to  direct 


92  THE  TRUST:    ITS  BOOK 

these  labour-saving  implements  and  machines. 
No  other  condition  would  justify  the  payment 
of  overseer's  wages,  which  the  American  wage- 
earner  is  receiving  to-day.  Man-power,  under 
these  conditions,  has  given  place  to  machine 
power ;  and  the  man,  instead  of  being  a  machine, 
a  mere  hand-worker,  daily  becomes  more  and 
more  a  brain-worker  and  more  and  more  a 
man.  This,  more  than  any  other  single  fact, 
accounts  for  the  increased  prosperity  of  our 
people,  their  larger  leisure,  larger  liberty  and 
larger  enjoyment  of  life. 

It  is  a  fact  that  the  larger  industrial  cor- 
porations require  the  best  workmen,  and  are 
to-day  distributing  in  wages  the  largest  sum 
of  money  so  paid  anywhere  in  the  world,  and 
at  higher  rates.  One  of  our  political  leaders 
of  national  importance  is  reported  to  have  said 
recently,  that  organizing  large  industrial  cor- 
porations was  "  good  business  but  bad  politics. " 
He  was  compelled  to  recognize  that  they  were 
distinctly  within  the  lines  of  economic  progress 
and  of  benefit  to  the  whole  community.  By 
"bad  politics"  he  meant  that  the  so-called 
"trust"  issue,  though  in  reality  a  false  issue, 
could  nevertheless  be  raised  to  create  discon- 
tent in  certain  quarters. 

The  reply  to  this  is,  that  such  organizations, 
the  basis  of  our  increasing  industrial  prosperity, 
stand  not  only  for  good  business,  but  good 
politics.  So  long  as  they  are  well  and  success- 
fully developed  on  conservative  lines,  giving 


THE  GOSPEL  OF  INDUSTRIAL  STEADINESS    93 

constant  employment  to  the  entire  community 
at  advanced  rates  of  wages,  with  lower  prices 
for  all  articles  consumed,  and  greater  oppor- 
tunities for  increased  profits  to  investors,  it 
will  be  impossible  for  even  the  wildest  dema- 
gogue to  show  that  "good  business"  is  "bad 
politics." 

The  vital  questions  of  to-day  are  economic 
ones,  and  the  politicians  would  do  well  to 
study  arithmetic.  The  political  party  that 
opposes  or  even  fails  to  recognize  and  applaud 
the  present  industrial  development,  the  promi- 
nent feature  of  our  prosperity,  has  no  more 
chance  for  permanent  success  than  if  it  based 
its  hopes  upon  advocating  laws  that  would 
result  in  paying  the  American  wage-earner 
fifty-cent  pieces  in  lieu  of  dollars. 

Compare  the  condition  of  our  people  with 
that  which  prevailed  before  the  aggregation 
of  wealth  and  intelligence  in  the  development 
of  industries,  when  wealth  was  obtained  by 
conquest,  not  by  industry;  when  the  present 
necessities  of  the  masses  were  luxuries  only 
for  the  rich.  By  such  a  comparison  we  realize 
that  the  emancipation  proclamations  of  human- 
ity were  written  by  Watt  and  Arkwright, 
Stephenson  and  Fulton,  Franklin  and  Morse, 
Bessemer  and  the  great  organizers  who  have 
applied  their  discoveries  and  distributed  the 
benefits  of  their  inventions  to  the  whole  world. 


CHAPTER   IV 

COMBINATIONS   AND   THE   PUBLIC 
JAMES  J.  HILL 

THERE  is  in  the  community  a  general  feeling 
of  hostility  towards  the  railroad  and  industrial 
consolidations  that  have  been  effected  and 
towards  those  that  are  now  under  way.  This 
hostility  is  strong,  but  undefined.  Much  of 
it  has  come,  undoubtedly,  through  the  teachings 
of  the  newspapers,  and,  in  a  measure,  through 
the  speeches  of  political  orators.  It  began 
when  the  "trust"  came  into  being  and  as  the 
result  of  an  effort  to  obviate  ruinous  competi- 
tion. The  "trust"  was  found  a  very  cumber- 
some structure,  and  the  law  of  the  land  de- 
clared it  illegal.  It  was  not  a  consolidation  in 
any  sense  of  the  word,  and  differed  entirely 
from  the  business  scheme  under  which  the 
consolidations  of  to-day  are  being  effected  and 
operated.  Under  the  "trust"  system  the 
stocks  of  various  and  competing  organizations 
were  trusteed  into  the  hands  of  a  few  men, 
to  whom  was  given  absolute  and  unqualified 
power  to  do  what  they  saw  fit  with  the  proper- 
ties placed  under  their  control.  It  was  not  on 
its  face  a  healthy  arrangement,  and  it  met  with 
violent  opposition  on  all  hands. 

95 


g6  THE  TRUST:    ITS  BOOK 

The  new  system  in  force  to-day  is  neither 
illegal  nor,  so  far  as  our  experience  thus  far 
has  shown,  harmful  to  the  community.  But 
the  people  at  large  have  not  yet  learned  to 
distinguish  between  the  new  and  the  old,  and 
the  odium  attaching  to  the  "trust"  is  visited 
on  the  consolidation.  The  old  scheme  left  in- 
tact all  the  corporations  it  found  in  existence. 
In  the  nature  of  things,  no  economy  in  produc- 
tion could  be  effected.  All  the  old  officers  of 
the  individual  organizations  remained.  Cer- 
tain plants  were  shut  down  to  restrict  the  out- 
put, but  this  process  affected  only  the  working- 
men  who  were  thrown  out  of  employment. 
The  high-salaried  men  continued  to  draw 
their  pay,  and  large  bonuses  were  paid  regu- 
larly to  the  stockholders  or  owners  of  the 
plants  that  had  been  put  out  of  business.  In- 
creased profits,  therefore,  could  generally  be 
obtained  only  by  an  increase  of  price  for  the 
product,  which  was  saddled  on  the  consumer. 
Under  the  new  system,  a  different  usage  pre- 
vails. Operating  expenses  are  reduced  by 
combining  a  number  of  institutions  under  one 
management.  Useless  officers  and  unproduc- 
tive middlemen  are  cut  off.  The  systems  of 
purchasing  and  distributing  are  simplified. 
Economies  are  effected  by  the  direct  purchase 
of  material  in  large  quantities,  or,  better  still, 
by  adding  to  the  combination  a  department 
for  the  acquisition  and  the  control  of  the 
sources  from  which  raw  material  is  drawn. 


COMBINATIONS  AND  THE  PUBLIC        97 

Thus,  the  Carnegie  Company,  which  was  the 
highest  type  of  this  system,  took  its  iron  from 
its  own  mines,  made  its  coke  in  its  own  ovens, 
worked  up  its  material  in  its  own  furnaces, 
and  shipped  the  finished  product  over  its  own 
railroad  or  in  its  own  vessels.  In  the  great 
Krupp  Iron  Works,  of  Germany,  this  system 
has  been  in  operation  for  two  generations; 
and,  instead  of  arousing  public  antagonism, 
the  Krupps  have  the  admiration  and  good  will 
of  the  entire  German  nation,  from  the  Emperor 
down. 

What  has  just  been  effected  in  the  great 
steel  combination  is  simply  an  enlargement  of 
the  Carnegie  plan,  and,  when  the  value  of  the 
great  properties  combined  is  taken  into  con- 
sideration, the  capitalization  of  one  thousand 
million  dollars  is  not  exorbitant.  The  Carnegie 
Company  by  itself  was  a  colossal  institution, 
so  colossal  that  it  dominated  the  steel  market 
absolutely.  But  because  it  happened  to  be  a 
single  company,  its  tremendous  proportions 
aroused  no  particular  opposition.  It  was  con- 
sidered a  fine,  healthy  enterprise,  as  it  should 
have  been  considered,  and  Mr.  Carnegie  and 
his  partners  were  not  looked  upon  in  any  sense 
as  "trust"  magnates.  While  hostilities  to 
many  other  concerns  were  raging  at  their 
fiercest,  the  organization  of  the  Carnegie 
Company  was  not  once  impugned  by  the  anti- 
consolidationists. 

From  all  accounts,  the  workmen  of  the  Car- 


98  THE  TRUST:    ITS  BOOK 

negie  Company  were  among  the  best  paid 
artisans  in  America.  The  company  could 
afford  to  pay  high  wages,  because  its  men 
worked  under  the  most  perfect  and  compact 
conditions.  Nothing  was  wasted,  nothing  of 
the  earnings  went  to  middlemen,  who  are  mere 
leeches  sucking  sustenance  from  the  business 
body  without  giving  anything  in  return. 

In  the  nature  of  things,  a  plant  bought  out 
or  added  to  the  Carnegie  Company's  proper- 
ties became,  by  the  mere  fact  of  such  addition, 
greatly  more  valuable  than  it  possibly  could 
have  been  under  independent  management  and 
control.  There  was  lopped  off  at  once  the 
item  of  executive  expenses.  There  was  no 
president's  salary  to  pay,  no  vice-president's, 
no  office  force.  The  purchasing  agents,  with 
their  salaries  and  commissions,  became  things 
of  the  past.  The  product  was  worked  up  in 
the  most  scientific  and  economical  manner 
and  put  on  the  market  under  the  best  condi- 
tions. 

The  point  sometimes  made,  therefore,  that 
a  factory  worth  $50,000  to-day  is  necessarily 
improperly  rated  at  $150,000  to-morrow,  be- 
cause it  has  been  combined  with  others  under 
one  managerial  head,  has  not  all  the  force  that 
might  appear  from  the  bald  statement  of  the 
facts.  A  property  is  not  necessarily  worth 
only  what  it  represents  in  the  way  of  real 
estate,  building  and  plant.  It  is  worth  rather 
what  it  represents  in  earning  capacity;  and,  if, 


COMBINATIONS  AND  THE   PUBLIC        99 

under  a  combination,  its  earning  capacity  is 
trebled,  because  of  the  economy  of  production, 
it  is  not  unreasonable  to  say  that  its  value  has 
been  trebled,  even  though  nothing  tangible 
has  been  added  to  its  material  assets.  Hard 
and  fast  rules  do  not  apply  to  the  value  of  any- 
thing. A  piece  of  property  worth  $1,000  to- 
day may  be  worth  $2,000  to-morrow,  merely 
because  some  improvement  has  been  made  in 
the  neighbourhood  which  adds  to  the  rental 
value  of  the  property  in  question.  Lands 
showing  evidences  of  iron  deposits,  which,  ten 
years  ago,  could  have  been  bought  for  ten 
dollars  per  acre,  or  even  less,  are  now  worth 
$50,000,000.  Not  cost,  but  earning  power, 
is  the  measure  of  value.  This  fact  is  exempli- 
fied every  day  in  almost  every  community  in 
the  country;  and  no  man  would  dream  of 
protesting  against  the  increased  valuation,  or 
object  to  the  placing  of  a  loan  at  such  increased 
valuation.  It  is  a  business  proposition  and 
must  be  treated  as  such. 

On  the  other  hand,  many  properties  are  not 
worth  the  price  that  was  paid  for  them,  though 
they  may  have  been  extensively  improved. 
English  agricultural  lands  represent  to-day 
a  far  higher  type  of  farming  than  ever  they  did 
before,  but  they  are  not  worth  nearly  as  much 
as  they  were  twenty-five  or  fifty  years  ago. 
The  opening  of  the  great  West  here  in  America 
has  given  the  English  farmer  a  competitor 
whom  he  cannot  meet  on  an  even  plane.  In 


ioo  THE  TRUST:    ITS  BOOK 

consequence  his  land,  though  it  has  lost  none 
of  its  productiveness,  is  worth  very  much  less, 
because  the  market  value  of  its  produce  is 
worth  less. 

The  feeling  existing  against  consolidations, 
as  I  said  before,  is  undoubtedly  general,  but 
investigation  will  prove  that  it  is  almost  in- 
variably unreasonable.  That  is  to  say,  as  an 
open  proposition,  the  majority  of  the  people 
will  declare  themselves  against  these  consolida- 
tions, say  they  are  bad  for  the  country  and 
speak  of  the  danger  that  lurks  in  the  "  trust "- 
as  they  still  call  it,  though  it  no  longer  is  a 
"trust"  in  any  sense.  But  they  are  rarely 
able  to  give  any  specific  reasons  for  their 
belief. 

There  are  a  few  men — that  is,  comparatively 
few — in  the  community  who  can  advance  good 
reasons  for  their  opposition.  They  are  the 
ones  who  have  been  caught  between  the  upper 
and  the  nether  mill  stones ;  they  are  the  middle- 
men, and  the  small  competitor  who  was  unable 
to  meet  the  larger  concern  in  the  open  market. 
To  them,  consolidation  has  been  a  distinct  in- 
jury. This  is  apparent,  and,  under  our  social 
and  business  system,  inevitable.  The  aim  in 
business,  as  in  politics,  is  to  do  the  greatest 
good  to  the  greatest  number;  and  the  greatest 
number — so  far  as  we  can  now  see — is  appa- 
rently benefited  by  the  consolidations.  Al- 
most every  improvement  that  helps  the  masses 
brings  injuries  to  individuals  here  and  there. 


COMBINATIONS  AND  THE  PUBLIC      101 

The  building  of  a  railroad  into  a  new  territory 
puts  the  owner  of  the  stage  coach  out  of  busi- 
ness. Trolley  cars  that  have  sprung  up  all  over 
the  country  have  done  grave  damage  to  the 
local  hackmen  and  livery  stable  keepers. 
But  the  community  which  is  brought  into 
touch  with  the  outer  world  by  a  new  railroad, 
and  the  village  or  town  that  gains  the  advantage 
of  cheap  and  quick  transportation  by  means 
of  the  trolley  car,  are  benefited  so  much  more 
than  the  stage  owners  and  hackmen  are  in- 
jured, that  the  balance  is  easily  in  favour  of  the 
improvements. 

In  all  such  improvements  the  chief  benefi- 
ciary is  the  workingman.  The  only  asset  he 
has  to  sell  is  his  time.  He  cannot  afford  to 
pay  a  quarter  for  a  hack  ride,  but  when  the 
trolley  comes  and  he  gets  a  quick  ride  for  five 
cents,  it  is  a  good  business  investment  for  him. 
The  rich  man  is  not  particularly  affected  by 
the  appearance  of  the  trolley.  He  still  rides 
in  his  carriage. 

We  are,  as  yet,  only  on  the  threshold  of  the 
new  era  in  the  business  world,  and  no  one  can 
say  positively  that  the  present  order  of  things 
is  and  will  be  for  the  best.  That  is  still  to  be 
proven,  and  it  can  be  proven  only  by  time. 
All  we  can  say  is  that,  so  far  as  we  have  gone, 
the  results  are  certainly  favourable.  Against 
the  alleged  injury  that  is  intangible,  can  easily 
be  put  the  benefit  that  can  be  shown  by  figures 
—benefit  to  the  workingman,  benefit  to  the 


102  THE  TRUST:    ITS  BOOK 

consumer,  benefit  to  the  capitalist.  Wages 
are  higher,  prices  are  lower,  investments  are 
safer,  more  productive  and  more  certain  of 
return. 

Where  great  consolidations  have  been  effected 
there  is  no  longer  any  danger  of  disturbance  in 
the  trade  through  the  erratic  action  of  an  in- 
dividual owner.  Strikes  are  much  more  re- 
mote where  a  general  and  uniform  rate  of  pay 
is  fixed  by  a  central  management. 

An  excellent  illustration  of  this  was  seen 
during  last  year's  strike  in  the  anthracite  coal 
regions.  There  the  general  scale  of  wages  was 
depressed  because  of  the  presence  of  a  consider- 
able number  of  independent  operators,  who 
could  not  or  would  not  pay  their  men  as  well 
as  the  big  companies — the  railroads — could 
pay,  because  the  latter  could  look  for  profit  both 
by  mining  the  product  and  carrying  it  to  market. 
Again,  a  settlement  of  the  strike  was  delayed 
because  the  smaller  operators  felt  they  could 
not  afford  the  increase  agreed  upon  by  the 
railroad  mining  company.  The  conditions  in 
the  coal  region  illustrates  very  forcibly  the 
value  to  the  workingmen  of  a  condition  where 
one  corporation  handles  the  product  from  be- 
ginning to  end,  thereby  ensuring  larger  profits, 
of  which  it  can  afford  to  give  its  employees  a 
part  in  the  shape  of  higher  wages  and  steadier 
employment. 

The  workingmen  benefit  also  in  another 
direction,  where  the  concern  for  which  they 


COMBINATIONS  AND  THE  PUBLIC      103 

work  is  backed  by  ample  capital  and  has  the 
benefit  of  concentrated  management.  They  are 
assured  the  use  of  the  most  perfect  machinery. 
A  big  concern  can  afford  to  make  improve- 
ments and  put  in  the  latest  machinery,  because 
such  improvements  and  machinery  necessarily 
add  to  the  productiveness  of  the  plant  at  a  rate 
that  will  soon  make  good  the  expenditure. 
The  smaller  concern,  while  it  realizes  this  fact, 
is  unable  to  avail  itself  of  the  latest  appliances, 
because  it  has  not  the  necessary  capital  to  in- 
vest. 

Another  advantage  of  prime  importance  to 
the  workingmen  is  that  they  may  easily  par- 
ticipate in  the  profits  of  these  enterprises  by  in- 
vesting their  savings  in  the  shares  of  the  more 
solid  and  prosperous  concerns.  Over  $2,400,- 
000,000  are  deposited  in  the  savings  banks  of 
the  United  States,  largely  made  up  of  the 
savings  of  the  wage-earners,  and  this  repre- 
sents only  a  portion  of  their  accumulations. 
With  these  vast  resources  at  command,  the 
workingmen  of  the  country  might,  in  a  few 
years,  acquire  a  large  interest  in  the  concerns 
in  which  they  are  employed.  The  opportuni- 
ties thus  afforded  for  safe  and  lucrative  in- 
vestment will  enable  them  to  share  in  the 
profits,  and  thus  unite  the  rewards  of  capital 
and  labour. 

The  consumer  is  assured  of  lower  prices 
when  a  big  concern  is  the  producer,  because 
such  a  concern  must  have  a  steady  market 


104  THE  TRUST:    ITS  BOOK 

for  its  output  in  order  to  keep  its  machinery 
busy.  The  loss  of  a  day  is  a  large  item.  There- 
fore, in  self-defence  the  big  concern  must  keep 
its  prices  within  the  figure  that  will  secure  the 
greatest  number  of  purchasers. 

Moreover,  if  the  result  of  these  industrial 
consolidations  is  steadily  and  relatively  to 
reduce  the  prices  of  their  products,  the  gravest 
of  the  speculative  popular  objections  to  them 
will  be  obviated  and  public  opinion  will  speedily 
recognize  the  benefits  to  the  people  at  large 
of  this  new  and  improved  machinery  of  pro- 
duction. The  very  motive  of  self-interest, 
even  the  law  of  self-preservation,  dictates  a 
policy  which  is  as  necessary  to  the  lasting 
business  prosperity  of  these  concerns  as  to  that 
popular  approval  without  which  they  cannot 
permanently  endure. 

This  is  the  theory  of  the  new  business  con- 
solidations; and  their  promoters,  judging  by 
the  results  attained  so  far,  believe  that  it  will 
work  out — that  it  is  a  good  policy  and  a  wise 
one  for  everybody.  Should  experience  prove 
that  it  is  not  a  good  condition  for  the  people 
at  large,  it  will  very  soon  be  upset.  Politically, 
the  scheme  has  never  been  passed  upon  as  yet ; 
and,  if  it  proves  a  good  scheme,  it  may  never 
be  a  distinct  issue  in  politics.  If  the  prosperity 
of  the  country  (much  of  which,  I  believe,  is 
due  to  the  consolidations  and  economies 
effected  so  far)  continues,  the  people  will  be 
content  to  let  well  enough  alone.  If,  however, 


COMBINATIONS  AND  THE  PUBLIC      105 

it  is  shown  that  we  are  on  the  wrong  track, 
and  that  consolidations  are  harmful  to  the 
people  in  general,  as  has  been  so  frequently 
stated,  the  question  will  undoubtedly  be 
settled  at  the  polls. 

There  was  much  talk  during  the  last  Presi- 
dential election  of  the  "  trusts  "  and  the  "  trust " 
issue;  but,  to  my  mind,  it  had  very  little  in- 
fluence one  way  or  the  other  with  the  voters. 
More  pressing  issues  obscured  it,  and  it  was 
only  a  side  affair,  so  that  politically  it  is  still  to 
be  settled,  if  the  situation  warrants. 

There  is  one  thing  that  the  people  who  deal 
lightly  with  the  new  business  scheme,  and  who 
want  to  sweep  it  aside  as  a  menace,  forget. 
We  have  reached  a  stage  in  our  national  devel- 
opment where  business  must  be  done  on  a 
different  plan  from  that  which  served  us  well 
half  a  century  ago.  In  1865,  when  the  war 
closed,  we  had  thirty-five  millions  of  people; 
to-day  we  have  over  seventy  millions.  That  is, 
we  have  doubled  our  population  in  thirty 
years.  If  we  are  advancing  at  the  same  rate — 
and  indications  point  to  the  conclusion  that  we 
are — we  will  have  over  one  hundred  and  fifty 
millions  in  1935.  In  other  words,  we  are 
adding  at  the  rate  of  one  and  a  half  to  two 
millions  a  year  to  our  population.  Thirty- 
five  years  ago,  or  even  ten  years  ago,  horse- 
cars  served  admirably  the  purposes  of  urban 
transportation.  To-day,  we  could  not  possibly 
get  along  without  the  trolley.  And  as  it  is  with 


106  THE  TRUST:    ITS  BOOK 

physical  conditions,  so  it  must  be  with  eco- 
nomic conditions;  we  must  keep  pace  with 
the  times.  We  have  reached  a  period  when 
the  old-fashioned  methods  will  prove  inade- 
quate, if  the  masses  of  the  people  are  to  con- 
tinue in  the  enjoyment  of  the  prosperity  to  which 
they  are  entitled.  There  are  too  many  people 
to  be  fed,  housed  and  clothed  to  permit  of  the 
wasteful  system  which  would  maintain  a 
horde  of  idle  middlemen.  People  in  this 
country  live  better  to-day  than  they  ever  did 
before  in  their  lives.  This  is  due,  I  believe, 
very  largely  to  the  improved  methods  of  pro- 
duction. There  are  fewer  drones  in  the  hive, 
fewer  people  who  share  the  results  of  work 
without  doing  any  work  themselves. 

All  progress  is  the  development  of  order.  A 
uniform  method  is  the  highest  form  of  order. 
The  benefit  accruing  to  the  people,  and  the 
extent  of  their  progress,  will  be  in  proportion  to 
the  extent  of  the  application  of  uniform 
methods  to  the  production  of  what  they  re- 
quire. 

In  railroading,  consolidation  so  far  has 
worked  as  satisfactorily  as  it  has  in  other  lines 
of  business.  Operating  expenses  have  been 
very  materially  reduced  by  combining  proper- 
ties, and  thus  cutting  down  the  list  of  high- 
priced  officers.  Where  there  were  half  a 
dozen  or  a  dozen  presidents,  each  drawing  a 
big  salary,  within  a  certain  territory,  the  rail- 
roads have  been  put  under  one  management, 


COMBINATIONS  AND  THE   PUBLIC       107 

and  we  have  one  president,  who  can  easily  do 
the  work  of  all  the  others,  and  do  it  on  one 
salary.  It  is  a  curious  thing,  in  this  connection, 
that,  while  the  protests  against  consolidation 
have  generally  come  from  men  and  news- 
papers who  talk  as  the  special  representatives 
of  workingmen,  the  real  hardship  of  consolida- 
tion, if  there  is  any,  has  fallen  upon  the  men 
who  drew  fancy  salaries,  and  did  very  little  to 
earn  them.  These  men  were  generally  stock- 
holders in  the  concerns  in  which  they  held 
office.  Every  small  railroad  that  began  no- 
where and  ended  at  the  cross-roads,  had  its 
president,  vice-president  and  so  on,  all  of 
whom,  under  the  new  order  of  things,  have 
disappeared.  These  men  were  essential  under 
the  old  order.  In  many  cases,  they  were  the 
builders  of  the  roads,  big  and  little,  that  have 
been  merged;  but  their  usefulness  has  ceased 
and  they  are  now  victims  of  the  new  conditions 
created  by  our  ever-increasing  population. 
They  were  the  men,  very  often,  who  created 
good,  healthy  competition.  But  the  day  for 
such  competition — in  railroads,  at  least — has 
pretty  well  passed  away  in  this  country.  We 
now  have  railroads  enough  to  insure  the  hand- 
ling of  all  reasonable  traffic,  and  to  add  in- 
discriminately to  the  mileage  would  simply 
increase  the  cost  of  this  handling.  It  would 
benefit  nobody.  Indiscriminate  railroad  build- 
ing is  the  worst  possible  thing  for  the  public, 
in  a  well-settled  community  where  the  roads 


io8  THE  TRUST:    ITS  BOOK 

in  existence  are  sufficient  for  the  traffic.  The 
public  in  the  end  pays  the  cost.  A  railroad 
must  either  earn  the  money  to  operate  it,  or 
else  borrow.  In  either  case  the  expense  is 
saddled  on  the  people.  If  there  are  two  lines 
where  one  line  will  suffice,  the  added  burden 
falls  on  the  public. 

In  Europe,  where  the  population  is  dense, 
this  fact  has  long  been  recognized,  and  the 
paralleling  of  a  railroad  is  forbidden  by  law. 
Good  service  can  only  be  given  by  a  road  that 
is  making  money.  A  road  operated  at  a  loss 
will  inevitably  run  down,  and  the  people  who 
are  compelled  to  use  it  will  be  the  chief  sufferers. 

The  road  that  can  give  the  longest  haul  in 
its  own  cars  over  its  own  lines,  can  make  the 
lowest  rates,  and  yet  earn  more  money  than 
could  be  made  on  a  haul  of  the  same  length  when 
the  cars  have  to  run  over  half  a  dozen  lines, 
each  separately  operated  by  a  staff  of  expensive 
officials.  If,  at  the  end  of  the  haul,  the  rail- 
road can  transfer  the  goods  or  passengers  from 
its  own  cars  to  its  own  steamships  for  carriage 
across  the  ocean,  the  process  is  continued. 
Having  no  separate  company  and  office  organi- 
zation to  be  supported  out  of  the  earnings  of 
the  steamships,  it  can  give  better  service  for 
less  money  than  its  competitor  less  fortunately 
situated.  That  is  a  self-evident  business  propo- 
sition. 

There  is  no  longer  danger  of  an  unjust 
squeezing  of  the  public  by  the  railroads  through 


COMBINATIONS  AND  THE  PUBLIC      109 

exorbitant  rates.  The  law  of  the  land  dis- 
tinctly provides  that  the  charges  a  railroad 
makes  for  freight  or  passenger  traffic  must  be 
"reasonable."  Now,  what  is  a  "reasonable" 
charge?  It  is  based  entirely  on  the  cost  of 
operation  and  maintenance,  and  its  relation  to 
the  value  of  the  property  used.  In  this  item 
are  included  the  payment  of  interest  on  bonds 
and  a  fair  return,  in  the  shape  of  dividends,  to 
the  stockholders. 

If  there  are  two  roads  to  be  maintained  and 
operated  where  there  is  use  for  only  one,  the 
traffic  must  somehow  be  made  to  bear  the 
burden,  and  the  basis  of  the  "reasonable  rate" 
is  necessarily  raised.  Competition  for  traffic 
may  force  a  temporary  reduction,  but,  ulti- 
mately, the  public  must  make  up  its  mind  to 
foot  the  bill. 

Where  rate  wars  are  precipitated,  the  injury 
to  the  people  along  the  line  is  about  as  great 
as  it  is  to  the  railroads.  This  is  true  particu- 
larly in  the  smaller  towns,  which  are  at  a  con- 
siderable distance  from  the  great  distributing 
centres,  and  where,  therefore,  freight  rates 
have  a  determining  influence  on  the  prices  of 
commodities.  The  rate  wars  unsettle  values, 
and  the  business  man  knows  hardly  from  day 
to  day  where  he  stands.  One  merchant  may 
be  put  to  a  heavy  loss  because  he  has  brought 
in  a  big  consignment  of  goods  at  one  rate,  while 
his  neighbour  across  the  way  brings  in  his  con- 
signment the  next  day  at  a  much  lower  figure. 


no  THE  TRUST:    ITS  BOOK 

Stable  and  reasonable  rates  are  absolutely 
necessary  to  the  consistent  well-being  of  the 
community.  There  was  a  time,  perhaps,  when 
railroads  gouged  people  at  non-competitive 
points,  but  that  time  has  passed.  Both  busi- 
ness prudence  and  the  law  now  regulate  these 
things.  Therefore,  railroad  consolidation,  with 
its  more  economical  operation,  means  as  much 
to  the  advantage  of  the  producer  and  the 
consumer  as  it  does  to  the  stockholder  of  the 
road.  Each  will  share  with  the  other  in  the 
result — the  one  in  the  shape  of  more  "reason- 
able" rates,  and  the  other  in  more  certain 
dividends. 


CHAPTER  V 

THE  TRUST:  AN  ALLIANCE  OF  WORK, 
BRAINS  AND  MONEY 

CHARLES  R.  FLINT 

A  COMBINATION  of  labour  is  a  trades  union;  a 
combination  of  intelligence  a  university;  a 
combination  of  money  a  bank;  an  industrial 
combination  is  a  combination  of  labour,  in- 
telligence and  capital — work,  brains  and  money. 

There  seems  to  be  much  confusion  in  the 
minds  of  the  people  as  to  the  difference  between 
a  trust  and  an  industrial  company,  due  to  the 
fact  that  those  who  talk  most  about  them  are 
not  yet  well  informed,  either  as  to  their  organi- 
zation or  operation.  A  trust  was  a  syndicate 
of  men  who  held  stock  certificates  of  several 
corporations  and  issued  trust  certificates  there- 
for. Now,  industrial  interests  are  represented 
by  shares  of  stock  in  regularly  organized  com- 
panies. Although  strenuous  efforts  were  made 
to  develop  the  trust  system,  it  was  found  to 
be  imperfect.  It  was  adopted  when  industrial 
combinations  were  in  their  infancy.  I  have 
always  been  opposed  to  the  trust  system  of 
organization.  They  were  not  required  to  have 
any  by-laws  or  keep  any  official  minutes  of 

zzi 


ii2  THE  TRUST:    ITS  BOOK 

their  proceedings,  or  to  make  any  official  re- 
ports. In  general  it  might  be  said  that  they 
possessed  great  power  without  sufficient  ac- 
countability. The  Supreme  Court  of  the  State 
of  New  York  declared  them  illegal,  and  every 
lawyer  who  is  informed  in  regard  to  industrial 
organizations  will  tell  you  that  that  decision 
has  been  accepted  as  final  throughout  the 
United  States.  But  the  word  "trust"  has 
since  been  applied  to  great  industrial  corpora- 
tions; and  as  the  word  represents  all  that  is 
best  in  human  character,  I  see  no  reason  why 
the  word  "trust"  should  not  be  adopted  as  a 
short  name  for  industrial  combinations.  May 
every  officer  and  wage-earner  in  every  "  Trust " 
realize  that  the  shares  of  stock  are  widely  dis- 
tributed among  widows,  orphans  and  others 
dependent  on  its  dividends  for  support,  and 
live  up  to  the  true  meaning  of  the  word. 

In  studying  the  evolution  of  industrial  life, 
we  find  that  combination  is  coincident  with 
civilization.  Savages  have  little  power  to 
combine,  because  combination  depends  on 
trust  in  our  fellow  man,  and  in  primitive  life 
it  is  fear  that  rules.  One  of  the  first  steps  in 
industrial  evolution  was  to  subdivide  produc- 
tion into  trades.  Each  did  what  he  could  do 
best,  settling  accounts  by  an  exchange  of  pro- 
ducts. Later,  those  engaged  in  the  same  trade 
formed  partnerships,  then  corporations,  and 
finally  consolidations  of  corporations. 

Against  this  march  of  industrial  progress 


THE  TRUST:  AN  ALLIANCE  113 

there  has  always  been  opposition.  There  have 
always  been  those  who,  appealing  to  special  in- 
terests, to  the  unsuccessful,  the  discontented 
and  the  misinformed,  have  endeavoured  to 
obtain  political  favour  by  opposing  progress, 
by  endeavouring  to  prevent  the  natural,  and 
mutually  beneficial,  co-operation  between  capi- 
tal and  labour. 

To-day  there  are  men  of  intellectual  re- 
finement and  pleasing  personality  far  removed 
from  the  centres  of  finance,  commerce  and 
industrial  activity,  who  read  of  industrial  life, 
but  who  are  not  in  it; — who  are  studying  the 
history  of  industrial  progress,  but  are  not 
making  that  history — and  yet,  as  Bismarck 
said,  "cursed  with  the  dangerous  gift  of  ora- 
tory, "  they  are  advocating  theories  in  business 
and  finance  that,  if  adopted,  would  shake  the 
very  foundations  of  our  industrial  existence. 
They  are  half-thinkers,  because  they  think 
without  the  facts.  They  remind  one  of 
General  Grant's  most  amusing  after-dinner 
speech  to  the  newspaper  men  of  New  York. 
He  said:  "A  feeling  of  awe  comes  over  me 
when  I  realize  that  I  am  in  the  presence  of 
men  of  such  marvellous  capacity.  Your  rapid- 
ity of  conception,  your  unerring  judgment, 
seem  supernatural.  When  I  was  before  Rich- 
mond, surrounded  by  men  who  had  made  a 
life  study  of  military  tactics,  when,  after  days 
and  nights  of  deliberation  a  plan  of  campaign 
was  finally  determined  upon,  one  of  you  would 


ii4  THE  TRUST:    ITS  BOOK 

get  down  to  your  office  late  at  night  and  in  a 
few  minutes  dash  off  an  editorial  telling  how 
we  were  all  wrong,  and  pointing  out  what  we 
ought  to  do.  Your  remarkable  versatility 
was  shown  in  formulating  legislation,  and  you 
were  peculiarly  strong  in  international  diplo- 
macy where  the  existence  of  State  secrets  made 
it  impossible  for  you  to  get  at  the  facts. " 

In  this  great  territory  of  ours  we  always 
have  with  us  those  who  try  to  make  people 
believe  that  their  siding  is  the  main  track. 
We  have  had  the  "Know-nothing"  craze,  the 
"Greenback"  craze,  the  "Granger"  craze, 
and  the  "Silver"  craze;  but  they  were  all  re- 
jected by  the  good  sense  of  the  American 
people.  To-day  our  farmers  recognize  that 
the  markets  of  the  world  have  been  opened  to 
them  through  the  great  systems  of  railways, 
which  have  resulted  in  the  heavy  steel  rail, 
the  eighty-ton  locomotive,  and  the  continuous 
haul.  Economically  the  wheat  fields  of  Da- 
kota are  nearer  to  London  and  Paris  than  the 
farms  of  Yorkshire  and  Burgundy.  Thus 
favoured,  our  farmers  during  the  past  few 
years  have  paid  off  so  many  mortgages  that  if 
ground  into  paper  pulp,  they  would  make 
ballots  enough  to  elect  a  President. 

The  men  of  sound  judgment,  leaders  in  the 
industrial  wars  for  the  supremacy  of  the 
American  farmer,  the  American  manufacturer 
and  the  American  wage-earner,  should  not  be 
disturbed  by  the  clamour  of  those  who,  not  in 


THE  TRUST:  AN  ALLIANCE  115 

the  struggle,  cannot  appreciate  actual  condi- 
tions, and  whose  leadership,  if  accepted,  owing 
to  their  inexperience,  would  conduct  us  to 
inevitable  disaster. 

Industrial  evolution,  which  is  as  inevitable 
and  as  unalterable  as  the  law  of  gravitation, 
has  attained  its  highest  development  here  in 
the  United  States.  Every  unprejudiced  man 
must  recognize  its  advantages,  and  that  it  is 
because  of  them  that  we  are  taking  so  im- 
portant a  position  in  the  world's  markets,  in- 
creasing our  national  wealth,  furthering  the 
welfare  and  increasing  the  prosperity  of  our 
people. 

The  great  problems  of  the  economics  of  pro- 
duction have  been  solved.  What  interests  us 
most  to-day  is  not  so  much  the  fact  of  our 
great  industrial  prosperity;  it  is,  rather,  the 
question  whether  the  advantages  of  that 
prosperity  are  equitably  divided  among  the 
contributors  to  it: — 

(1)  Capital, 

(2)  Superintendence  and 

(3)  Labour. 

(i)  The  share  to  capital  takes  the  form 
either  of  interest  or  dividends. 

We  find  that  the  rate  of  interest  paid  to  those 
furnishing  money  to  industrial  enterprises  is 
decreasing.  Fifty  years  ago,  the  average  rate 
throughout  the  United  States  was  eight  per 
cent  per  annum.  Now  it  is  less  than  five  per 
cent.  This  general  rule  can  be  laid  down :  that 


n6  THE  TRUST:    ITS  BOOK 

the  greater  the  confidence,  the  higher  and 
more  perfect  the  industrial  organization,  the 
lower  the  rate  of  interest.  During  the  year 
1896  the  stability  of  our  currency  and  the 
fundamental  conditions  of  our  industrial  devel- 
opment was  regarded  by  many  with  doubt; 
and  money  loaned  as  high  as  twenty  per  cent. 
The  investor  is  ever  willing  to  take  lower  in- 
terest in  exchange  for  greater  security  and  for 
a  steadier  and  less  precarious  demand  for  his 
funds.  Thus  that  form  of  industrial  organiza- 
tion which  furthers  careful  financing,  opens 
wider  markets  and  guarantees  greater  confi- 
dence and  stability,  is  directly  in  the  interest 
of  capital,  although  the  rate  of  return  on 
capital  is  thereby  steadily  reduced. 

The  dividends  received  by  shareholders  are 
larger  than  the  interest  rates,  because  the  risk 
is  greater.  Moreover,  being  partners  and  share- 
holders, they  are  entitled  to  a  larger  share  in 
the  advantages  of  combination.  Still  it  is 
doubtful  if  the  aggregate  of  dividends  is  as 
large  as  the  aggregate  of  interest.  Dividends 
are  never  absolutely  certain,  and  they  are 
never  paid  until  labour  and  superintendence 
have  first  had  their  share. 

(2)  What  is  the  position  of  the  man  of 
superior  intelligence?  for  superintendence 
stands  midway  between  capital  and  labour. 

Highly  developed  organizations,  resulting 
in  enormous  volume  of  business,  have  increased 
the  necessity  for  intelligence.  As  the  supply  of 


THE  TRUST:  AN  ALLIANCE  117 

brains  is  not  equal  to  the  demand,  the  price  of 
brains  is  high.  The  turning  over  of  individual 
businesses  to  combinations  has  caused  the 
retirement  of  old  men  to  the  advisory  board 
for  judgment,  and  has  made  way  for  young 
men  for  action.  You  ask,  "What  chances 
have  our  young  men?"  While  you  are  asking 
the  question,  those  of  ability  and  energy  have 
already  started  on  a  career  of  successful  indus- 
try. If  the  student  will  leave  his  books  and 
the  orator  his  stump  and  go  to  our  factories, 
to  our  great  farms,  to  our  mines,  to  our  lines 
of  railways,  they  will  find  ten  times  as  many 
men  receiving  over  $3,000  per  annum  as  there 
were  thirty  years  ago. 

Mr.  Schwab,  of  Pittsburgh,  is  a  type.  He 
started  as  a  stake  driver  of  an  engineering 
corps.  To-day,  though  under  forty  years  of 
age,  he  is  president  of  the  largest  iron  company 
in  the  world.  I  can  point  out  a  hundred 
successful  men  to-day  where  you  could  not 
have  named  ten  under  old  conditions. 

But,  it  is  said,  they  are  dependent.  De- 
pendence upon  each  other  is  however  the  con- 
dition of  civilization.  The  very  word  civiliza- 
tion implies  community  life,  and  community 
life  means  mutual  dependence.  Complete  in- 
dependence is  found  only  in  the  wigwam  of  the 
Indian.  There  the  young  man  builds  his  own 
house,  makes  his  own  clothes,  gets  his  own 
meat,  and  keeps  his  bank  account,  if  he  has 
any,  in  his  pocket.  The  best  opportunity  he 


u8  THE  TRUST:    ITS  BOOK 

has  for  distinction  is  in  showing  superior 
prowess  in  hunting,  or  superior  strength  in 
paddling  his  own  canoe.  In  civilized  life, 
interdependence  is  more  profitable  than  in- 
dependence. Your  young  man,  instead  of 
paddling  his  own  canoe,  can  command  one  of 
those  great  combinations,  which  is  doing  so 
much  to  benefit  the  world — the  modern  steam- 
ship. Was  Captain  Clark  less  the  commander 
or  Chief  Milligan  less  the  engineer,  because 
each  was  dependent  on  the  other  in  making 
the  historic  run  and  the  splendid  fight  of  the 
Oregon?  Each  gave  to  the  other  his  oppor- 
tunity. One  might  just  as  well  say  that  a  man 
has  no  opportunity  in  political  life  because  we 
have  a  police  system  and  no  man  can  do  as  he 
pleases.  On  the  contrary,  just  as  a  good 
system  of  national  police  is  a  guarantee  of  liberty 
so  these  great  organizations  are  guarantors  of 
opportunities  which  otherwise  would  never 
exist. 

Let  us  not  waste  time  in  considering  who  will 
take  care  of  these  young  men  of  superior  in- 
telligence; they  will  take  care  of  themselves. 
The  Almighty  has  given  the  greater  power  to 
superior  intelligence,  and  as  Samuel  J.  Tilden, 
one  of  Nature's  great  monopolists  in  the  do- 
main of  intellect,  has  said:  "You  cannot 
substitute  the  wisdom  of  the  Senate  and  As- 
sembly for  the  plan  of  moral  government 
ordained  by  Providence. " 

(3)  Let  us  now  consider  the  interests  of  the 


THE  TRUST:  AN  ALLIANCE  119 

workingman  in  this  economic  evolution  which 
has  produced  the  perfect  machinery  and  giant 
factories,  supported  by  great  aggregates  of 
capital  represented  by  shares  which  enable  all 
to  become  investors.  It  is  a  fundamental  fact 
that  the  man  of  superior  ability  cannot  accu- 
mulate for  himself  without  giving  to  the  wage- 
earners  an  opportunity  to  earn  the  larger 
share,  and  it  is  always  an  increasing  share. 

The  tendency  to-day  is  to  a  minimum  of 
profits  and  to  a  maximum  of  wages.  When 
profits  become  abnormal,  they  invite  compe- 
tition, and  are  immediately  reduced.  In  which 
case  the  consumer  alone  is  benefited.  If  they 
are  not  sufficiently  abnormal  to  invite  com- 
petition, then  labour  demands  a  larger  share 
of  the  profits  in  the  form  of  increased  wages ; 
and  it  is  either  voluntarily  or  necessarily 
agreed  to.  In  this  case,  the  body  of  wage 
earners  reaps  the  advantage;  and,  inasmuch 
as  the  body  of  wage-earners  is  the  great  body 
of  the  community,  the  community  is  benefited. 
Employees  know  almost  as  promptly  as  do  the 
employers,  whether  a  mill  is  earning  an  ex- 
travagant profit.  If  it  is,  they  at  once  de- 
mand their  share,  and  the  employer  must 
inevitably  yield.  It  is  thus  that  wages  always 
tend  to  a  maximum,  and  profits  to  a  minimum. 

The  maintenance  of  the  high  standard  of 
wages  now  paid  in  the  United  States  is  abso- 
lutely dependent  upon  our  realizing  the  ad- 
vantages which  come  through  superior  organi- 


120  THE  TRUST:    ITS  BOOK 

zation.  We  are  to-day  shipping  manufactured 
goods  to  countries  where  the  rates  of  wages 
average  forty  per  cent,  less  than  our  wage- 
earners  are  receiving.  Of  our  exports  of 
manufactured  goods,  eighty  per  cent,  are  pro- 
duced by  large  industrial  corporations.  Ar- 
ticles of  manufacture  which  we  do  not  produce 
through  consolidations  are  being  almost  en- 
tirely supplied  to  the  neutral  markets  by  the 
cheap  labour  countries — Germany,  Belgium 
and  England.  The  centralization  of  manu- 
facture and  consequent  use  of  special  machinery 
have  emancipated  the  slave — have  raised  the 
American  workman  to  the  position  of  over- 
seer, not  of  pauper  labour,  but  of  its  produc- 
tive equivalent,  machinery.  And  he  is  re- 
ceiving, and  is  entitled  to,  the  wages  of  super- 
intendence. The  intelligent  labour  leaders 
understand  this  perfectly.  It  was  my  pleasure 
to  entertain  at  my  home  some  of  the  best 
known  of  these.  Speaking  of  labour  condi- 
tions, I  asked  one  of  them  to  define  the  differ- 
ence between  his  organization  and  that  of  the 
professional  agitators.  He  replied :  "  We  hope 
to  bring  about  by  evolution  what  they  claim 
should  be  accomplished  by  revolution."  They 
said  that  they  "welcomed  new  machinery, 
because  it  did  the  work  which  had  heretofore 
degraded  labour." 

The  wage-earners  of  the  United  States  are 
to-day  enjoying  a  higher  standard  of  living 
and  a  larger  measure  of  well-being  than  wage- 


THE  TRUST:  AN  ALLIANCE  121 

earners  have  ever  before  enjoyed  in  the  history 
of  the  world.  They  are  the  real  money  power. 
The  railroad  managers  have  rails  and  rolling 
stock;  the  miner  has  mines;  the  manufacturer 
has  bricks,  mortar  and  machinery,  and  most 
of  them  have  debts,  and  many  are  mortgaged 
to  the  banks  for  savings;  but  the  wage-earners 
in  the  United  States  have  on  deposit  in 
cash  in  the  savings  banks,  subject  to 
call,  two  thousand  five  hundred  millions  of 
dollars. 

Thus  through  co-operation  and  combina- 
tion every  interest  is  being  benefited,  labour 
most  of  all.  As  wage-earners  become  more 
intelligent,  as  they  become  overseers  of  ma- 
chinery, they  better  understand  these  condi- 
tions. They  have  the  intelligence  to  recog- 
nize that  their  greatest  comfort  and  happiness 
is  in  furthering  the  industry  of  which  they  are  a 
part.  To-day  one  of  the  great  advantages 
that  the  United  States  has  over  Europe  is  that 
its  labourers  are  the  more  intelligent,  are  the 
healthier  and  happier.  The  European  wage 
earner,  instead  of  welcoming  labour-saving 
machinery  as  our  workingmen  in  the  United 
States  have  done,  has  tried  persistently  to 
retard  its  general  use.  The  result  has  been 
that  wages  have  been  lower  in  Europe.  The 
American  workman  has  received  more  because 
he  has  produced  more.  This  is  the  great 
reason  why,  notwithstanding  our  high  wages, 
we  are  so  rapidly  extending  our  trade  with 


122  THE  TRUST:    ITS  BOOK 

foreign  markets.  The  best  factory  inevitably 
gets  the  most  work.  There  is  a  continual 
struggle  for  existence  between  good  factories 
and  poor  factories,  and  the  good  factory  in- 
variably wins. 

The  law  of  consolidation  of  capital  and 
division  of  labour  holds  as  good  in  the  field  of 
distribution  as  in  that  of  production.  It  is 
inevitable  and  it  is  profitable.  The  depart- 
ment stores  and  the  mail  order  stores  sell  for 
ten  per  cent,  instead  of  thirty  per  cent,  profit, 
and  the  consumer  thus  saves  twenty  per  cent. 
The  profit  obtained  by  the  distributor  of 
staples,  on  the  way  from  the  farmer  to  the 
consumer,  is  less  than  one-quarter  what  it  was 
thirty  years  ago.  The  farmer  secures  a  wider 
market,  the  consumer  gets  his  staples  much 
more  cheaply,  and  the  enterprising  middleman 
has  improved  banking  and  transportation 
facilities  to  do  a  larger  business.  This  is 
why  he  has  adopted  as  his  motto,  "Quick 
sales  and  small  profits." 

The  real  benefits  of  "  capitalistic  production, " 
as  compared  with  production  on  a  small  scale, 
are  twofold.  The  first  and  greatest  benefit 
of  industrial  combinations  goes  to  the  whole 
body  of  the  community  as  consumers,  through 
reduction  in  prices.  The  next  benefit,  and 
that  next  most  largely  distributed,  goes,  as  I 
have  shown,  to  the  workers  through  increase  of 
wages,  and  thus  it  happens  that  the  working- 
man  gains  simultaneously  in  two  ways.  He 


THE  TRUST:  AN  ALLIANCE  123 

gets  more  money  for  his  work  and  more  goods 
for  his  money. 

Having  reviewed  the  position  of  our  great 
consolidated  corporations  as  the  results  of  an 
economic  evolution,  something  should  be  said 
with  regard  to  their  capitalization.  In  general 
there  has  been  much  greater  conservatism  in 
the  capitalization  of  industrials  than  there 
was  in  the  original  capitalization  of  railroads. 
Our  railroads  were  built  principally  for  the 
amount  of  the  bond  issues,  and  the  stock  repre- 
sented the  capitalized  hopes  of  the  projectors. 
The  issues  of  industrial  bonds  have  been  con- 
siderably below  the  actual  value  of  the  tangible 
assets,  and  industrial  stock  issues  have  gener- 
ally been  based  on  actual  earning  capacity. 
Still  it  undoubted  that  there  has  been  more 
than  one  instance  of  marked  over-capitaliza- 
tion of  industrials,  and  no  proper  legislative 
measure  to  remedy  this  wrong  or  prevent  its 
recurrence  should  be  neglected. 

Fortunately,  the  evil  caused  by  careless 
investing  and  unwise  capitalization  tends  to 
correct  itself  by  natural  laws.  Investors, 
confused  by  the  few  inflated  industrials  which 
were  put  out  simultaneously  with  the  sound 
ones,  are  afraid  to  buy,  and  the  organizers, 
unable  to  sell  their  securities,  now  realize  that 
sound  capitalization  is  the  best  policy. 

In  organizing  industrial  companies,  pre- 
ferred stock,  which  is  intended  for  an  invest- 


124  THE  TRUST:    ITS  BOOK 

ment  security,  should  not  be  issued  in  excess 
of  tangible  assets,  except  in  special  cases  where 
there  is  a  very  large  earning  capacity  protected 
by  very  valuable  patents  or  trade-marks. 
Verified  earnings  and  regular  dividends  will 
establish  confidence;  and  the  prices  of  the 
shares  in  the  well-organized  and  well-managed 
Industrials  will  advance  as  did  the  stocks  of 
railroad  companies  which  were  originally  is- 
sued for  good-will. 

In  taking  a  comprehensive  view  of  the  or- 
ganization and  operation  of  industrial  com- 
binations, we  cannot  close  our  eyes  to  the  fact 
that  in  the  evolution  of  industrial  progress,  as 
in  all  human  affairs,  there  are  imperfections 
and  abuses  for  which  it  is  our  duty  to  try  to 
find  a  remedy.  But  we  should  not  permit 
those  desirous  of  gaining  political  advantage 
to  exaggerate  these  imperfections  to  such  an 
extent  as  to  blind  us  to  the  fact  that  it  is 
through  industrial  combinations  we  are  able 
to  pay  high  wages  and  continue  our  prosperity. 
They  would  have  us  confine  our  vision  to  a 
dead  tree  in  the  landscape  instead  of  looking 
all  around  the  horizon.  It  is  such  narrow- 
minded  men  who  at  times  talk  against  our 
form  of  government  because  some  of  its  de- 
partmental machinery  does  not  work  to  entire 
satisfaction. 

While  believing  in  great  organizations ;  while 
knowing  that  they  are  a  necessity  if  this  country 
is  to  remain  a  great  power  in  the  economic 


THE  TRUST:  AN  ALLIANCE  125 

world  and  thereby  continue  the  prosperity  of 
the  wage-earners  of  the  land,  I  do  not  believe 
in  large  aggregations  of  wealth  in  the  hands 
of  individuals  unfitted  to  wisely  administer 
them. 

Wealth  is  a  serious  trust,  and  when  left  to 
those  who  lack  experience  in  the  use  of  it,  is 
often  a  curse  instead  of  a  blessing.  Money 
does  us  good  only  as  we  part  with  it.  There 
could  be  no  great  benefactions  without  great 
fortunes.  After  providing  a  reasonable  com- 
petency for  one's  family,  the  greatest  satis- 
faction that  can  be  obtained  with  money  is 
to  build  up  educational  institutions,  to  help 
our  aspiring  young  men  to  help  themselves. 
Under  corporate  ownership  this  can  be  done 
without  liquidating  or  contracting  great  busi- 
ness organizations  whose  influence  is  so  far- 
reaching  that  they  may  properly  be  called 
great  business  universities.  Such  organiza- 
tions should  be  sustained  and  improved,  in 
justice  to  the  wage-earners  and  managers  who 
have  assisted  in  building  them  up,  and  the 
investors  who  are  dependent  on  their  dividends 
for  support. 

One  of  the  features  of  our  industrial  situa- 
tion is  that  many  of  the  men  who  have  built  up 
these  great  organizations  are  retiring.  Those 
men  who  have  blazed  the  way  in  this  new 
and  rapidly  developing  country  have  been  the 
ablest  industrial  leaders  the  world  has  ever 
known,  such  men  as  Carnegie  and  Huntington, 


i26  THE  TRUST:    ITS  BOOK 

Rockefeller  and  Field,  Armour  and  Vander- 
bilt — the  thinkers,  the  doers,  the  organizers — 
men  whose  creations  are  the  great  land-marks 
in  our  industrial  history.  It  is  fortunate  that 
we  have  had  such  leaders.  They  did  their 
work  with  the  aggressive  force  that  comes  of 
natural  energy  and  temperate  living,  and  with 
the  judgment  that  comes  of  experience.  They 
have  understood  and  have  been  in  sympathy 
with  the  people  because  they  have  been  of  the 
people,  and  the  example  of  these  men,  rising 
from  the  ranks,  gives  impulse,  encouragement 
and  high  aspirations  to  every  workingman  in 
the  land.  They  made  their  fortunes  by  re- 
ducing the  percentage  of  profits  and  increasing 
the  volume  of  business;  by  reducing  the  rate 
of  freight  on  a  barrel  of  flour  to  the  Atlantic 
from  $3.00  to  45  cents;  by  reducing  the  price  of 
steel  from  $100  per  ton  to  $20;  by  improving 
the  quality  and  reducing  the  price  of  provisions 
and  of  by-products,  while  paying  a  higher  price 
to  the  farmer  for  the  animal;  by  reducing  the 
price  of  oil  from  30  cents  to  10  cents;  by  re- 
ducing the  price  of  cotton  cloth  from  20  cents 
to  5  cents.  They  realized  that,  in  order  to 
make  their  combinations  a  grand  success,  they 
must  increase  consumption  by  reducing  prices. 
Thus  they  not  only  helped  to  develop  a  great 
home  trade,  but  enabled  us  to  open  the  door  of 
foreign  markets,  resulting  in  the  enormous 
trade  balance  in  our  favour,  on  which  our  pros- 
perity so  largely  depends. 


THE  TRUST  :  AN  ALLIANCE  127 

The  industrials  to-day  are  owned  by  the 
many.  While  economic  evolution  is  central- 
izing production  in  large  corporations,  de- 
centralization of  ownership  goes  on  simultane- 
ously through  the  rapid  distribution  of  shares. 
There  are  many  hundred  times  more  partners 
in  manufacture,  mining  and  railways  than  there 
were  thirty  years  ago,  and  the  number  is 
rapidly  increasing.  Women  rarely  had  an 
opportunity  of  obtaining  an  interest  in  busi- 
ness organizations.  Now  they  are  large  share- 
holders of  corporations,  and  as  such  they  have 
the  full  right  of  suffrage. 

Under  the  old  conditions  of  private  owner- 
ship, the  control  of  many  of  our  industrial 
enterprises  would  have  been  inherited  by  one 
individual  or  family.  Now  the  control  is 
subject  to  the  same  rule  that  prevails  in  the 
administration  of  our  State,  and  that  is  the 
rule  of  the  majority.  It  is  seldom,  and  fortu- 
nately so,  as  preventing  great  aggregations 
of  wealth  in  the  hands  of  individuals  or  fami- 
lies, that  the  heirs  of  industrial  giants  have 
the  capacity  to  succeed  to  the  direction  of 
gigantic  enterprises.  Many  inheritors  of  great 
fortunes,  enervated  by  ease  and  luxury,  prefer 
a  life  of  indolence,  or  to  chase  the  will-o'the- 
wisps  of  society;  others  prefer  to  devote  their 
time  to  literature  or  art;  others  to  enter  upon 
scientific  pursuits.  Under  the  old  conditions 
they  would  have  inherited  the  control  of  in- 
dustries, but  under  the  present  conditions  of 


128  THE  TRUST:    ITS  BOOK 

industrial  consolidation,  the  majority  of  the 
stockholders — for  generally  speaking,  the  nu- 
merical majority  is  also  the  majority  in  interest 
— elect  as  officers  aspiring  young  men  who 
have  proved  their  ability  and  judgment  to 
assume  the  responsibilities  of  leadership.  Ow- 
ing to  the  higher  evolution  of  our  industrial  or- 
ganizations these  men  are  developing  greater 
intelligence  and  superior  ability  to  those  who 
have  preceded  them.  Thus  the  fittest  sur- 
vive. 

In  life  nothing  is  stationary;  contraction  or 
expansion  goes  on  continuously,  and  if  you 
don't  expand  you  contract.  It  is  so  with 
nations:  Spain  contracts;  the  United  States 
expands.  So  it  is  with  industry.  There  are 
periods  of  expansion  when  the  mills  are  run- 
ning full,  and  there  are  periods  of  contraction 
when  the  number  of  unemployed  is  large. 
Confidence  is  at  the  foundation  of  expanding 
business  activity.  The  amount  of  business 
transacted  on  credit  is  over  two  thousand 
times  that  transacted  in  exchange  for  gold  or 
silver.  If  there  is  confidence,  the  manufac- 
turer employs  many  hands,  the  labourers  pur- 
chase more,  the  retailer  buys  more  goods,  the 
jobber  orders  more  from  the  manufacturer, 
the  manufacturer  to  still  further  increase  his 
output,  employs  more  hands,  and  every  man 
who  wants  work  can  find  it.  This  is  pros- 
perity. 

Lack  of  confidence  causes  contraction.     The 


THE  TRUST;  AN  ALLIANCE  129 

manufacturer  is  afraid  to  make  many  goods, 
discharges  some  of  his  labourers;  they  pur- 
chase less;  the  jobber  cancels  his  orders;  the 
manufacturer  must  still  further  reduce  his  pay- 
roll. The  result  is  "hard  times." 

Nothing  better  proves  how  sensitive  confi- 
dence is  than  the  holding  up  of  business  because 
of  the  remote  possibility  of  legislation  which  may 
conflict  with  natural  laws.  In  1896,  the  dis- 
cussion as  to  changing  our  financial,  legal  and 
industrial  systems,  created  sufficient  uneasiness 
to  cause  our  bank  clearings  to  decline  twelve 
per  cent,  in  comparison  with  the  corresponding 
months  of  the  previous  year.  It  caused  an 
enormous  advance  in  interest  rates,  and  threw 
out  of  work  a  whole  army  of  men  and  women. 
You  are  all  familiar  with  the  change  which 
took  place  in  1897  when  conditions  became 
assured — how  renewed  confidence  set  the  wheels 
of  prosperity  in  motion,  a  result  which  every 
one  familiar  with  industrial  conditions  then 
predicted.  If  the  mere  possibility  of  unwise 
and  immature  financial  and  industrial  legisla- 
tion caused  such  a  panic  as  that  of  1896,  what 
a  terrible  cataclysm  would  be  occasioned  if, 
instead  of  the  possibility,  we  were  confronted 
with  the  actuality.  The  difference  would  be 
that  between  the  storm  and  the  cyclone.  On 
the  other  hand,  remove  all  questions  as  to  the 
sanity  and  conservatism  in  our  laws,  as  to  the 
stability  of  our  currency,  as  to  the  continuity 


130  THE  TRUST:    ITS  BOOK 

of  our  industrial  development  in  accordance 
with  natural  laws,  and  we  shall  enjoy  a  condi- 
tion of  prosperity  such  as  no  other  country  in 
the  world  has  ever  known. 

When  we  entered  upon  a  period  of  prosperity 
in  1897,  it  was  after  convalescing  from  a 
period  of  severe  contraction.  Now  we  are 
producing  gold  at  the  rate  of  one  and  a  half 
millions  a  week,  and  have  a  balance  of  trade 
in  our  favour  of  over  one  and  a  half  millions 
a  day.  Our  exports  of  manufactured  goods 
have  been  forty  per  cent,  more  during  the  past 
two  years  than  during  the  previous  two  years, 
and  the  balance  of  trade  in  manufactures  has 
amounted  to  more  during  the  past  four  years 
than  during  the  previous  existence  of  the 
Republic. 

Owing  to  the  mistrust  in  1896,  we  were 
obliged  to  appeal  to  Europe  for  financial  help. 
We  were  compelled  to  borrow  money  at  high 
rates  of  interest.  During  the  past  four  years, 
owing  to  our  undisturbed  industrial  develop- 
ment, we  have  exported  the  products  from 
farm  and  factory  to  such  an  extent  that  the 
balance  of  trade  in  our  favour  has  amounted 
to  two  billions  of  dollars,  which  makes  us  a 
great  factor  in  foreign  commerce  and  a  world 
power  in  finance.  England,  Russia,  Germany 
and  Sweden  have  come  to  us  for  money,  and 
the  credit  of  the  United  States  Government  is 
higher  to-day  than  that  of  any  other  nation. 
When  all  doubt  is  forever  removed  as  to  the 


THE  TRUST:  AN  ALLIANCE  131 

perpetuity  of  our  gold  standard,  the  American 
eagle  will  inevitably  become  the  unit  of  inter- 
national exchange  in  place  of  the  English 
sovereign. 

In  view  of  the  fact  that  the  maintenance  of 
high  wages  in  the  United  States  is  largely 
dependent  upon  our  increasing  exports,  the 
question  is  asked  whether  we  could  sustain 
them  in  competition  with  the  cheap  labour  of 
China,  were  China  to  become  a  manufacturing 
country.  The  best  answer  is  that  in  one  year, 
among  our  other  exports,  we  have  shipped 
two  hundred  million  yards  of  cotton  cloth 
to  the  Chinese.  The  average  rate  of  wages 
paid  by  us  in  its  manufacture  was  seven  times 
the  average  rate  of  wages  prevailing  in  China. 

The  Chinese,  like  the  people  in  our  own 
country  who  have  a  Chinese  cast  of  mind,  do 
not  recognize  the  advantages  of  combination. 
Industrially  they  are  living  in  the  land  of  yes- 
terday, instead  of  in  America,  the  land  of  to-day 
and  to-morrow.  Notwithstanding  her  great 
agricultural  and  mineral  wealth,  notwith- 
standing the  fact  that  she  has  the  largest  body 
of  cheap  labour  in  the  world,  China  is  not  an 
efficient  competing  factor  in  the  field  of  pro- 
duction because,  in  spite  of  all  these  facilities, 
she  has  none  of  the  antecedents,  intellectual, 
political,  financial  or  mechanical  for  large  scale 
production  under  modern  conditions,  since 
she  possesses  none  of  the  instruments  of  com- 
mercial greatness  and  social  well-being. 


132  THE  TRUST:    ITS  BOOK 

Twenty  centuries  of  stationary  policy  and  of 
looking  backwards  have  made  political  pro- 
gress and  economic  development  impossible 
for  China.  She  has  remained  in  industrial 
infancy.  Lacking  industrial  organization  and 
all  that  goes  with  it  in  the  way  of  production 
on  a  large  scale  aided  by  large  aggregations  of 
capital  and  under  conditions  which  attract 
and  ennoble  the  greatest  abilities,  her  agri- 
cultural and  mineral  wealth  and  her  cheap 
labour  cannot  save  her.  She  is  left  utterly 
behind  in  the  economic  race  and  her  vast 
territories  are  now  threatened  with  partition 
among  the  European  powers. 

Our  contractionists  would  practically  have 
us  put  a  wall  around  the  United  States  which 
would  reduce  wages  and  prevent  the  working 
out  of  our  destiny  as  a  world  power  in  com- 
merce, in  finance  and  in  the  greater  and  nobler 
field  of  doing  our  part  in  the  advancement  and 
civilization  of  mankind. 

Situated  as  we  are,  between  the  great  oceans, 
combining  the  strength  of  a  great  land  power 
with  that  of  a  great  sea  power,  we  are  pushing 
our  way  across  the  Pacific  as  we  have  already 
done  across  the  Atlantic.  But  this  increase 
is  small  compared  with  the  increase  that  is 
destined  to  take  place  when  no  question  is 
being  raised  as  to  the  stability  of  the  founda- 
tions on  which  rests  this  great  industrial 
prosperity.  With  our  untold  natural  resources, 
with  our  inexhaustible  supply  of  metals  and 


THE  TRUST:  AN  ALLIANCE  133 

coal,  with  our  great  forests,  with  every  variety 
of  soil  and  climate,  with  the  most  industrious, 
most  intelligent  and  most  contented  of  peoples 
working  under  the  best  conditions  of  modern 
methods,  we  are  destined  to  become  the  eco- 
nomic masters  of  the  world. 


CHAPTER   VI 

INFLUENCE  OF  THE  TRUST  ON 
PRICES 

FRANCIS  B.  THURBER 

A  FURTHER  evolution  in  the  organization  of 
industries  by  the  formation  of  "a  Trust  of 
Trusts"  in  the  steel  industry,  with  a  capital 
approximating  a  billion  of  dollars,  has  given 
fresh  occasion  for  discussion  of  the  so-called 
"Trust"  question,  and  has  increased  the  al- 
ready large  number  of  citizens  who  fear  evil 
from  such  consolidations.  There  is  a  wide- 
spread impression  that  "Trusts"  result  in  un- 
reasonable prices,  through  which  the  many 
are  taxed  for  the  benefit  of  the  few,  and  it  may 
be  interesting  to  inquire  how  far  this  impres- 
sion is  confirmed  by  the  facts — not  single  and 
sporadic  facts,  but  facts  which  cover  a  sufficient 
time  and  a  sufficient  field  to  indicate  the  general 
tendency.  Let  us,  then,  examine  their  effect 
upon  prices,  as  indicated  in  the  following 
.statistics  taken  from  United  States  Govern- 
ment reports. 

I. 

The  first  great  organization  of  industry  in 
the  United  States  was  the  consolidation  of 

135 


136  THE  TRUST:    ITS  BOOK 

railway  lines,  and  its  effect  upon  the  prices  of 
transportation  is  shown  in  the  following  table : 

AVERAGE  RECEIPTS  PER  TON  PER  MILE  OF  LEADING  RAIL- 
ROADS IN  1870,  1880,  1890  AND  1899.  INCLUSIVE. 

Railway  Lines.  1870  1880  1890  1899 

Cents.  Cents.  Cents.  Cents. 

Lines  East  of  Chicago 1.61  0.87  0.63  0.51 

West  and  Northwest  Lines  .  2.61  1-44  i.oo  0.92 

Southwestern  Lines 2.95  1.65  i.n  0.93 

Southern  Lines 2.39  1.16  0.80  0.62 

Transcontinental  Lines 4.50  2.21  1.50  0.99 

Average i-99  i.i?  0.91  0.70 

This  result  has  been  attained  largely  through 
combinations  and  consolidations,  which,  con- 
trary to  the  impression  generally  entertained, 
have  not  resulted  in  abolishing  competition,  but 
rather  in  economies  of  operation  and  improve- 
ment in  service,  accompanied  by  a  steady  re- 
duction in  rates.  Railway  freight  rates  in  the 
United  States  are  less  than  one-half  those  of 
other  principal  countries.  Our  railways  carry 
our  chief  products  one  thousand  miles  to 
our  seaboard  for  less  than  the  railroads 
of  other  countries  charge  for  carrying  these 
products  two  hundred  miles  inland  from  the 
seacoast  after  they  have  crossed  the  ocean. 

Passenger  rates  have  not  declined  as  largely 
as  freight  rates,  but  there  has  been  a  material 
decline  in  passenger  rates  also  in  the  period 
covered  by  the  above  statistics,  while  the  qual- 
ity of  the  service  has  been  greatly  improved, 
with  a  corresponding  increase  in  its  cost  to  the 
railways. 

The  railroad  of  twenty  years  ago,  with  its 


INFLUENCE  OF  THE  TRUST  ON  PRICES  137 


equipment,  would  not  be  tolerated  to-day. 
How  many  of  us  appreciate  the  privilege  of 
stepping  into  a  parlour  on  wheels  and  being 
hurled  through  space  at  the  rate  of  forty  miles 
an  hour,  with  as  much  safety  as  if  we  sat  in 
our  drawing  rooms  or  were  sleeping  in  our 
beds  at  home  ? 

II. 

The  next  great  "Trust"  was  the  Standard 
Oil  Company,  and  its  influence  on  prices  is 
evidenced  by  the  following  statistics: 

PRICES  OF   REFINED   ILLUMINATING   OIL,  PER  GALLON. 

EXPORTED  FROM  THE  UNITED  STATES.  1871  TO  1902* 
Year. 


1871 
1872 
1873 
1874 
1875 
1876 
1877 
1878 
1879 
1880 
1881 


Cts. 
35.  7 

Year. 
1882  

Cts. 

.  .  O.I 

Year. 
1893  .. 

Cts. 

1883  ... 

......  8.8 

1894  . 

23.5 
18.3 
14.  i 

1884  
1885  
1886  .  .  . 

9-3 
8.7 
.  .  8.7 

1895  .. 
1896  .  . 
1897  .  . 

::::::::*:! 

6.3 

14-0 

21  .  I 

1887  
1888  

7-8 
7.9 

1898  .  . 
1  899  .  . 

::::::::  11 

14-4 

10.8 
8.6 
.  10.3 

1889  
1890  .  .  .  . 
1891  
1892  . 

7-8 
7-4 
7-o 
.  5.9 

1900  .  . 
1901  .  . 
1902  .  . 

7.8 
7-6 
7-  a 

This  decline  in  the  price  of  oil  is  attributable 
partly  to  the  increase  in  production,  but  more 
largely  to  improvements  in  manufacture  and 
transportation,  which  were  only  attainable 
through  the  aggregation  of  capital  in  this  in- 
dustry , 

III. 

The  next  great  "Trust"  in  the  order  of  for- 
mation was  the  American  Sugar  Refining  Com- 

*  The  prices  represent  the  market  value  of  article  at 
the  time  of  exportation. 


THE  TRUST:     ITS  BOOK 


pany,  or  the  "Sugar  Trust,"  a  corporation 
formed  under  the  laws  of  the  State  of  New 
Jersey  for  the  purpose  of  consolidating  the 
sugar-refining  interests  of  the  country.  Until 
recently,  when  additional  capital  flowed  into 
this  channel,  it  did  about  eighty-five  per  cent, 
of  the  sugar-refining  business  in  the  United 
States.  The  tendency  of  prices  under  its  in- 
fluence is  shown  by  the  next  two  tables,  giving, 
respectively,  the  average  price  of  both  raw 
and  refined  sugar,  with  the  differing  margins, 
during  the  nine  years  prior  to  and  the  nine 
years  immediately  following  its  consolidation 
in  1887: 

Centrifugals,        Granulated,      Difference 
Raw,  per  Ib      Refined,  per  Ib.          Per  Ib. 
Cents. 


Year. 
1879  

Cents. 
6.93 

1880  

7  .  88 

1881  

7.62 

1882  

7  .  29 

1883  

6.97 

1884  

5  .  29 

1885  

5.19 

1886  , 

,  5.52 

1887  .. 

.  .5..  18 

Average,  nine  years 6.43 


9.80 
9.7° 
9-35 
8.6s 
6.75 
6.53 
6.23 
6. 02 

7.98 


Cents. 
1.88 
1.92 
2.08 
2.06 
1.86 
1.46 
1-34 
•  7i 
.64 


1-55 


For  nine  years  after  the  formation  of  the 
Trust,"  prices  were: 


Year.  Cents. 

1888 5.93 

1889 6. 57 

1890 5-57 

1891 3.92 

1892 3.32 

1893 3.69 

1894 3.24 

3.23 

3.62 


Centrifugals,      Granulated,     Difference 
Raw,  per  Ib.  Refined,  per  Ib.         per  Ib. 


1895 
1896 


Average,  nine  years 4 . 34 


Cents. 
7.18 
7.89 
6.27 
4-65 
4-35 
4.84 
4.12 
4.12 
4-53 

5-33 


Cents. 

•  32 
.70 

•  73 


.88 
.89 
.91 

.98 


INFLUENCE  OF  THE  TRUST  ON  PRICES  139 

Since  1896  prices  have  been  affected  by 
changes  in  the  tariff,  and  more  recently  by 
increased  competition,  consequent  upon  the 
construction  of  new  refineries,  which  at  times 
have  reduced  margins  to  an  absolutely  unre- 
munerative  point. 

The  figures  for  succeeding  years  are  as  follows : 

Centrifugals,  Granulated,     Difference 

Raw,  per  Ib.  Refined,  per  Ib.  per  Ib. 

Year.                                                 Cents.  Cents.  Cents. 

1897 3-S6  4-50  .94 

»898 4-*4  4-97  -73 

1899 4.42  4.93  .50 

1900 4.57  5.32  .75 

»9<« 4-09  5-04  .95 

Average  five  years 4.17  4.95  .77 

This  reduction  in  price  to  the  consumer  has 
been  effected,  partly  by  increased  production, 
and  largely  through  buying  the  raw  material 
more  cheaply  than  when  a  large  number  of 
separate  refiners  were  competing  for  the  pro- 
duct. Large  economies  were  also  effected  by 
closing  inferior  plants  and  enlarging  and  ex- 
tending superior  ones.  The  American  Sugar 
Refining  Company  has  bought  its  raw  material  at 
cheap  rates,  but  it  has  given  the  public  the 
benefit  of  such  purchases,  merely  retaining  as 
its  profit  about  one-third  of  a  cent  per  pound, 
which,  considering  the  nature  of  the  business, 
is  a  reasonable  one.  It  employs  more  labour 
and  pays  higher  wages  than  were  employed  and 
paid  before  the  organization  of  this  industry. 

In  the  three  years  preceding  the  formation 
of  the  "Trust,"  twelve  sugar  refineries  failed, 
throwing  thousands  of  operatives  out  of  em- 


140 


THE  TRUST:    ITS  BOOK 


ployment.  There  is  such  a  thing  as  unreason- 
able competition  as  well  as  reasonable  compe- 
tition. The  first  drives  the  selling  price  of  the 
article  so  low  as  to  be  incompatible  with  living 
profits,  humane  hours,  honest  wages  and  good 
quality.  The  organization  of  industry  is  a 
protest  against  unreasonable  and  destructive 
competition.  The  nine  refineries  consolidated 
into  the  "Trust"  had  twenty-seven  partners; 
now  the  "Trust"  representing  these  nine  re- 
fineries has  over  11,000  partners  in  the  form 
of  stockholders.  Is  this  consolidation  or  dis- 
tribution ? 

IV. 

Among  the  more  recent  organizations  is  the 
"Paper  Trust,"  known  as  the  International 
Paper  Company,  organized  in  1897.  The 
contract  prices  of  ordinary  newspapers  for  ten 
years  covering  a  period  before  and  after  its 
formation  afford  interesting  material  for  study. 

CONTRACT  PRICES  FOR  NEWSPAPER  PAPER  FOR  TEN  YEARS. 


Year. 
1890  

Cents, 
per  Ib. 
3.61 

Cents. 
Year.                per  Ib. 
1896                   .35 

1891 

1897  18 

1892  

3.12 

1898  02 

1893  

2  .90 

1  899  oo 

180* 

2  .  75 

1  900  50 

1895  . 

.  2.40 

Notwithstanding  the  advance  which,  owing 
to  the  increased  demand,  has  taken  place  since 
1899,  prices  for  paper  are  far  below  those  of  ten 
years  ago,  and  it  is  safe  to  say  that  neither  the 


INFLUENCE  OF  THE  TRUST  ON  PRICES  141 


tariff  nor  trusts  have  had  any  appreciable  effect 
upon  the  price  of  paper. 

The  prices  above  quoted  are  the  lowest  con- 
tract prices  from  first  hands.  Jobbing  prices 
are  somewhat  higher;  and,  on  an  advancing 
market,  jobbers  sometimes  advance  their  prices 
unduly,  and  lay  the  blame  on  "trusts,"  when 
the  trusts  have  had  nothing  to  do  with  the  ad- 
vance. 

V. 

The  latest  and,  according  to  many  journalis- 
tic utterances,  the  most  startling  of  the  trust 
organizations  is  "the  billion  dollar  steel  trust." 
This  is  a  consolidation  of  trusts  in  that  line; 
and,  while  we  cannot  give  figures  to  show  its 
effect  upon  future  prices,  the  following  figures 
for  iron  and  steel  in  the  past  furnishes  a  basis  for 
future  comparison  which  will  be  interesting.  I 
foretell  results  similar  to  those  indicated  by  the 
foregoing  illustrations  in  other  lines. 

The  fluctuations  in  iron  and  steel  have  been 
greater  than  in  most  staples,  as  is  shown  by 
the  following  statistics,  giving  the  prices  for 
"  Bessemer  pig  iron  "  for  a  period  of  ten  years : 


Year. 

Dollars, 
per  ton. 
8.85 

Year. 
1896  

Dollars, 
per  ton. 
12.14 

1891   
1892  

5-95 
4-37 
2.87 

1897  
1898  

10.13 
10.33 

1.38 

ipoo    

19.49 

1895                 .  . 

2,72 

March,  1901  

16.50 

January.  1002.  ., 

.    16.50 

That  the  tariff  had  nothing  to  do  with  the 
advance  in  prices  since  1898  is  shown  by  the 


142 


THE  TRUST:    ITS  BOOK 


following  comparison  of  English  and  American 
prices  for  steel  rails  for  each  month  during  1899, 
which  illustrates  the  influence  of  supply  and 
demand. 


i8gg.  English. 

January $22 . 44 

February 23 . 24 

March 23 . 04 

April 33 . 64 

May 24-90 

June 24 . 90 

July 25 . 50 

August 30 . 96 

September 30 . 36 

October 32.76 

November 32 . 76 

December 34.02 


American. 
$18.00 
30.50 
22.00 
25.00 
25.00 
25.00 
26.00 
31-33 
32.00 
33-00 
35-00 
35-00 


The  steel  trust  has  not  abrogated  competition ; 
it  has  simply  elevated  it  to  a  higher  plane. 
There  are  several  plants  outside  of  the  trust, 
which  are  capable  of  being  a  David  to  the 
Goliath,  if  the  Goliath  should  prove  unreason- 
able. 

VI. 

Let  us  now  consider  the  fluctuations  of  prices 
in  staples  which  are  not  controlled  by  "  trusts, " 
but  some  of  which  are  supposed  to  be  influenced 
by  tariffs. 

The  following  prices  are  for  "washed  Ohio 
fleece  wool,"  which  grade  is  less  subject  to 
variations  than  most  of  the  other  grades,  and 
thus  furnishes  a  better  basis  for  comparison : 


Year. 

Cents 
per  Ib. 
33 

Year. 
1806 

Cents 
per  Ib. 
19 

1891 

1897 

19 

1892                . 

30 

1898  .  .          

29 

26J$ 

1804. 

32ji 

::::::::::  ifo 

March,  1901  

27 

January,  1902 

27 

INFLUENCE  OF  THE  TRUST  ON  PRICES  143 

For  several  years  coffee  has  been  declining 
in  price,  owing  to  the  fact  that  the  supply  has 
exceeded  the  demand,  as  is  shown  by  the  follow- 
ing statistics: 

AVERAGE  ANNUAL  COST  OF  NO.  7  RIO  COFFEE. 

Cents,  Cents, 


Year. 

perlb. 
18.03 

Year. 
1896   

per  Ib. 
12.15 

1891    

16.40 

1897   

9  .  80 

1892  

14.43 

1898   

6.80 

1893  

17  .42 

6  25 

1804  . 

16.41 

8.30 

1895         

i  S  .  80 

•            7   35 

January,  1002.  .  . 

,      6  .  so 

When  prices  declined  below  the  cost  of  pro- 
duction, production  decreased,  consumption 
increased,  and  prices  began  to  advance  again. 
Good  times  and  speculation  helped  the  advance 
along. 

Prices  have  advanced  from  the  lowest  point, 
but  what  their  fluctuations  will  be  depends 
upon  supply  and  demand. 

In  cotton  we  have  the  same  phenomena  that 
we  have  in  coffee,  as  is  illustrated  by  the  follow- 
ing statistics  of  prices  for  middling  cotton,  and 
we  have  the  same  cause  and  effect : 


Year. 
1890  

Cents, 
perlb. 
ii  .07 

Year. 
1896  

Cents 
perlb. 
7  .93 

1891  

8.60 

1897  

7.00 

1892  

7.71 

1898  

5.  94 

1893  

8.56 

1899  

6.88 

iSoj. 

9.  2  < 

1895  

7-44 

March,  1901  

8.75 

January.  1902.  .  . 

.  8.  as 

VII. 

Power  and  machinery  brought  to  bear  upon 
natural  resources  have  so  increased  production, 


144  THE  TRUST:    ITS  BOOK 

that  wider  and  more  frequent  fluctuations  in 
prices  are  to  be  looked  for  in  the  future  than 
have  occurred  in  the  distant  past. 

The  Hon.  Carroll  D.  Wright,  United  States 
Commissioner  of  Labour,  and  one  of  the  most 
conservative  statisticians,  recently  published 
the  result  of  his  investigations  into  the  relative 
productive  power  of  hand  and  machine  labour. 

A  thousand  paper  bags  could  formerly  be 
made  by  hand  in  six  hours  and  thirty  minutes ; 
they  are  now  made  in  forty  minutes  with  the 
aid  of  a  machine.  To  rule  ten  reams  of  paper 
on  both  sides  by  hand  required  4,800  hours; 
with  a  ruling  machine,  the  work  is  done  in  two 
hours  and  thirty  minutes  of  one  man's  time. 
In  shelling  corn  by  hand,  sixty-six  hours  and 
forty  minutes  would  be  required  to  shell  a 
quantity  which  can  be  handled  by  a  machine 
in  thirty-six  minutes.  A  mowing  machine  cuts 
seven  times  as  much  grass  per  hour  as  one  man 
can  cut  with  a  scythe.  These  examples  might 
be  extended  indefinitely;  but  a  more  forceful 
illustration  will  be  found  by  considering  the 
total  horse-power  applied  to  machines  in  this 
country  and  calculating  how  many  men  it 
would  require  to  do  the  same  work.  For  such 
calculations  the  census  figures  of  1890  must  be 
used. 

One  horse-power  is  equivalent  to  the  power 
of  six  men.  Thus,  if  the  work  of  63,481  men 
in  the  flour  mills  of  the  United  States  is  sup- 
plemented by  the  use  of  752,365  horse-power, 


INFLUENCE  OF  THE  TRUST  ON  PRICES  145 

the  power  is  equivalent  to  the  work  of  4,514, 190 
additional  men.  That  is,  it  does  seventy-two 
times  as  much  work  as  the  employes. 

The  ratio  differs  radically  in  different  in- 
dustries. Mr.  Wright  finds  that  the  total  horse- 
power used  in  the  United  States  in  1890*  was 
about  6,000,000,  equivalent  to  the  work  of  36,- 
000,000  men,  while  only  4,476,884  persons 
were  employed,  the  two  kinds  of  power  having 
a  ratio  of  8  to  i.  A  force  of  36,000,000 
men  represents  a  population  of  180,000,- 
ooo,  so  that  if  the  products  of  the  manu- 
facturing establishments  were  all  made  by 
hand,  it  would  require  a  population  of  that  size 
to  do  it,  with  none  left  for  agriculture,  trade, 
transportation,  mining,  forestry,  the  profes- 
sions, or  any  other  occupations. 

A  still  more  striking  illustration  is  found  in 
our  transportation  system.  In  1890  there 
were  over  30,000  locomotives  in  this  country. 
It  would  take  57,940,320  horses  to  do  their 
work,  or  347,425,920  men.  In  countries  like 
China,  nearly  all  the  work  of  transportation 
is  actually  done  by  man  power,  and  no  further 
explanation  of  the  economic  difference  between 
America  and  Asia  is  required.  By  the  use  of 
steam  we  are  evoking  aid  from  the  heat  stored 
up  in  our  coal  beds,  equivalent  to  the  working 
efficiency  of  the  population  of  the  whole  earth, 
while  the  Chinaman  lets  his  coal  lie  under- 
ground, packs  his  load  on  his  back,  and  does 
his  manufacturing  largely  by  hand. 


146  THE  TRUST:    ITS  BOOK 

Mr.  Mulhall,  the  British  statistician,  calcu- 
lated in  1895  that  the  use  of  steam  power  had 
increased  five-fold  in  the  United  States  in 
thirty-five  years,  thus  more  than  trebling  the 
collective  working  power  of  the  population. 
He  also  remarks  that  the  working  energy  of 
one  American  is  more  than  double  that  of  one 
European.  Thus  the  civilized  world,  with  the 
United  States  leading,  is  yearly  doing  an  in- 
creasing amount  of  useful  work,  while  Asia 
does  no  more  than  it  did  a  thousand  years  ago. 
This  fact  alone  will  explain  the  demand  for  the 
"open  door,"  and  the  growing  world-domina- 
tion of  the  machine-using  nations. 

Steam  is  our  Genie  of  the  Lamp,  electricity 
our  Slave  of  the  Ring,  and  machinery  an  addi- 
tional slave,  which  the  imagination  of  the 
Arabian  romancist  did  not  picture.  In  former 
times  the  men  who  possessed  a  thousand 
human  slaves,  and  grew  rich  upon  their  labour, 
were  but  few ;  to-day  the  men  who  own  the 
power  of  a  thousand  horses,  embodied  in 
mechanical  slaves  which  speak  all  languages 
and  serve  all  masters  with  equal  fidelity,  are 
almost  too  numerous  for  enumeration.  The 
inventors  of  the  United  States  have  created 
these  slaves,  and  we  are  selling  them  to  other 
nations  at  a  rate  which  must  soon  impair  the 
advantage  we  have  heretofore  enjoyed,  and 
level  up  and  level  down  labour  the  world  over. 

This  is  the  ground-swell  of  cause  which  the 
statesmen  of  the  world  have  to  adjust  to  effect. 


INFLUENCE  OF  THE  TRUST  ON  PRICES  147 

The  captains  of  industry,  who  have  been  in 
contact  with  and  have  comprehended  and 
grasped  these  controlling  forces  in  this  evolu- 
tion of  industry,  have  profited  pecuniarily  from 
it;  but  all  they  have  got  out  of  it  is  a  living, 
somewhat  more  luxurious,  perhaps,  than  that 
of  the  average  citizen,  but  any  surplus  which 
they  have  not  left  to  hospitals,  churches  and 
education  has,  in  most  cases,  enervated  and 
cursed  their  children.  Many  of  them  appre- 
ciate this,  and  we  will  have  more  Harvards  and 
Yales  and  Cornells,  and  Johns  Hopkins  and 
Stanfords  and  Vanderbilts  and  Rockefellers 
and  Carnegies  and  Morgans  in  the  future. 

The  talk  about  an  Emperor  in  this  country, 
which  the  distinguished  president  of  one  of  our 
great  universities  recently  indulged  in,  may  be 
dismissed  as  a  passing  thought  in  a  Lenten 
sermon. 

The  organization  of  industry  has  taken  place 
so  suddenly  that  the  public  has  been  startled, 
as  a  good  horse  will  shy  at  an  umbrella  when  it 
is  opened  suddenly  in  his  face ;  but  let  the  horse 
smell  the  umbrella  and  see  that  it  is  not  danger- 
ous and  his  alarm  will  subside.  Thus  will  it 
be  with  the  feeling  of  the  public  toward  trusts. 
Their  evil  will  be  eliminated,  their  good  will  be 
developed,  their  usefulness  to  mankind  demon- 
strated, and  the  bogy  which  the  rivalries  of 
sensational  journalism  and  partisan  politics 
have  conjured  up  will  fade  into  thin  air. 

The  facts  and  the  views  herein  stated  are 


148  THE  TRUST:    ITS  BOOK 

presented  as  an  antidote  to  those  of  the  alarm- 
ists, but  with  a  full  appreciation  of  the  tides 
and  currents  of  public  sentiment,  which  affect 
the  industries  and  welfare  of  our  country. 
These  are  indicated  in  the  following  quotation 
from  the  circular  of  a  conservative  banking 
house  in  relation  to  the  new  steel  trust : 

"  It  will  be  cited  in  Congressional  and  Legislative  halls 
as  full  of  danger  to  American  institutions  through  such 
unprecedented  concentration  of  power  in  individual  hands. 
It  will  revive  the  advocacy  of  Government  ownership  of 
railway  lines  and  of  more  stringent  "anti-trust"  legisla- 
tion, and  it  cannot  be  denied  that  it  brings  up  a  very 
grave  question  before  the  American  people  as  to  the  ex- 
tent to  which  the  laws  of  the  land  shall  permit  or  support 
such  tremendous  centralization  of  power  in  the  industrial 
world.  We  might  add,  also,  that  it  is  likely  to  occasion 
at  the  next  session  of  Congress  a  very  active  movement 
for  the  abolition  of  duties  on  all  products  made  by  this 
consolidated  company,  and  if  the  tariff  is  once  brought 
up  as  a  subject  of  serious  discussion  and  amendment 
there  is  no  telling  where  it  will  end.  We  all  know  that 
the  agitation  of  tariff  revision  is  detrimental  to  general 
business;  for,  while  it  is  in  progress,  both  importers  and 
manufacturers  restrict  their  operations  until  they  know 
to  a  certainty  what  the  result  of  the  tinkering  is  to  be. 
Of  course,  these  facts  are  not  going  to  affect  the  immediate 
market  for  the  shares,  but  they  must  enter  into  the  minds 
of  the  big  holders  and  lead  them,  as  the  occasion  offers,  to 
part  with  their  holdings  to  the  general  public,  as  far  as  the 
general  public  will  be  disposed  to  buy." 

If  any  legislation  in  regard  to  "trusts"  is 
necessary,  it  is  in  the  direction  of  publicity  and 
reports,  for  the  protection  of  investors.  The 


INFLUENCE  OF  THE  TRUST  ON  PRICES  149 

practice  of  over-capitalization,  or  stock  water- 
ing, is  considered  by  many  persons  a  great  evil, 
but  it  is  an  injury  rather  to  those  who  practise 
it  than  to  the  general  public.  Real  values  are 
reflected  in  the  market  prices  of  securities. 
Bay  State  Gas  was  quoted  at  $i  per  share, 
with  a  par  value  of  $100,  when  Standard  Oil 
was  above  $800.  Capitalization  is  usually 
based  upon  earning  power,  and  in  this  "good 
will"  is  often  a  factor.  A  newspaper  with  a 
plant  worth  $50,000  may  earn  $100,000,  net,  per 
year.  If  a  company  was  organized  on  this, 
what  should  its  capital  be  ?  A  railroad  is  pro- 
jected, which,  when  built  and  with  a  large 
traffic  developed,  can  pay  dividends  upon  a 
capital  which  would  seem  very  large  in  its 
inception,  and  yet  carry  for  the  public  at  low 
prices.  Unless  its  projectors  had  had  a  pros- 
pect of  a  profit  the  railway  would  not  have  been 
built.  So  far  as  the  interest  of  investors  is 
concerned,  they  should  have  information,  and 
they  can  then  use  their  own  judgment.  There 
are  frauds  in  all  kinds  of  merchandise,  and 
the  doctrine  of  caveat  emptor  is  of  universal  ap- 
plication. 

Mr.  Carnegie  has  said  that  a  successful  busi- 
ness was  like  a  three-legged  stool,  standing  on 
labour,  capital  and  brains;  or  brains,  labour 
and  capital;  or  capital,  brains  and  labour — 
that  neither  is  first  and  all  are  inter-dependent. 
The  United  States  is  fortunate  in  having  such  a 
citizen  as  Andrew  Carnegie  and  millions  of 


150  THE  TRUST:    ITS  BOOK 

others  who,  with  opportunity,  like  him,  are 
capable  of  "rising  on  stepping  stones  of  their 
dead  selves  to  higher  things" ;  there  can  be  no 
dissent  from  Mr.  Carnegie's  kaleidoscopic  con- 
ception. The  combination  of  any  two  elements 
in  the  trinity  can  be  pulled  down  by  the  dis- 
sent of  the  third.  Each,  therefore,  must  recog- 
nize the  usefulness  of  the  other  and  its  share 
in  the  enormous  benefits  which  Providence  has 
conferred  upon  the  human  race  in  placing  such 
resources  of  nature  and  such  slaves  as  steam, 
electricity  and  machinery  at  their  disposal  to 
develop  them 


CHAPTER    VII 

WHAT  COMBINATION  HAS   DONE  FOR 
CAPITAL  AND   LABOUR 

CHARLES  R.  FLINT 

THE  people  who  lack  either  the  time  or  the 
inclination  to  examine  into  the  truthfulness 
of  things  are  so  numerous  in  the  world  that  it 
is  a  comparatively  easy  thing  to  set  a  fallacy 
afloat  as  a  fact.  Thanks  to  this  condition  of 
the  public  mind,  an  entirely  false  notion  re- 
garding industrial  properties  prevails.  Out 
of  every  ten  thousand  men  in  the  community, 
there  is  hardly  one  who  would  not  state  it  as  a 
hard  and  fast  proposition  that  the  industrial 
enterprises  of  the  country  that  have  been 
brought  together  under  the  present  system  of 
consolidation  are  all  outrageously  over-capital- 
ized, and  that  their  stocks  present  about  the 
most  hazardous  investment  conceivable. 

As  a  test  of  what  is  really  behind  the  industrial 
stocks  that  are  being  dealt  in  on  the  Stock 
Exchange  and  on  the  curb,  I  have  gone  into 
the  figures  of  thirty  among  the  most  prominent 
companies.  These  companies  were  selected 
at  random.  The  greatest  of  all,  the  Stand- 
ard Oil  Company,  which  last  year  paid  48  per 


1 52  THE  TRUST:    ITS  BOOK 

cent,  on  the  par  value  of  its  stock,  is  purposely 
not  included  in  the  list.  Nor  need  the  Standard 
Oil  Company  be  included,  for  without  it  we 
arrive  at  an  average  that  will,  I  believe,  astonish 
many  even  among  those  who  have  been  most 
active  in  the  handling  of  these  stocks.  The 
statements,  giving  the  name  of  companies,  the 
capital  stock,  common  and  preferred,  the  net 
income,  the  market  value  of  the  stocks,  and  the 
percentage  of  earnings,  is  given  in  a  concise 
tabular  form  on  the  next  page.  It  will  repay 
close  study  by  any  person  who  really  wants  to 
get  at  the  true  condition  of  values  to-day.  He 
will  find  that,  instead  of  inflated  values  and 
boom  quotations,  we  are  trading  on  a  very 
sound  basis.  He  will  find  that  the  industrials, 
almost  without  exception,  are  worth  a  great 
deal  more,  judged  by  their  earning  capacity, 
than  they  are  selling  for  in  the  open  market. 
Some  of  these  industrials  are  earning  over  18 
per  cent,  a  year  on  their  market  values,  and  the 
average  for  the  entire  30  is  11.5  per  cent. 

Even  more  astonishing  than  the  earnings  on 
the  market  value  are  the  earnings  on  the  par 
value.  A  very  popular  impression  exists  that 
industrials  are  composed  principally  of  water. 
The  best  answer  to  this  is  that  that  the  thirty 
companies  included  in  the  appended  table  show 
an  average  earning  rate  of  6.9  per  cent,  on 
their  total  capitalization  at  par. 

Choosing  between  two  evils,  we  are  told  that 
if  we  must  have  consolidations,  the  danger 


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153 


154  THE  TRUST:    ITS  BOOK 

lurking  in  the  consolidation  of  railroads  is  per- 
haps not  so  great,  "because  they  are  based  on 
sounder  considerations.  Their  stocks  and 
bonds  have  not  been  doubled  or  trebled  or 
unduly  inflated."  In  other  words,  railroad 
stocks  rest  on  a  sounder  basis  than  do  indus- 
trials. 

Even  if  this  statement  were  accurate,  which 
it  is  not,  it  would  call  for  this  commentary: 
that  there  is  scarcely  one  of  the  great  railroads 
of  this  country  whose  shares  are  now  quoted  at 
favourable  prices  on  our  Exchanges,  which  has 
riot  undergone  the  process  of  reorganization, 
because  they  were  injudiciously  organized. 
And  while  the  common  stock  of  many  great 
industrial  corporations  may  be  said  to  have 
been  issued  not  to  represent  tangible  property, 
nevertheless,  it  represents  a  fair  equivalent  for 
tangible  property,  namely  good  will  or  earning 
power  long-established,  which,  for  obvious 
reasons,  is  as  rightfully  a  matter  of  valuation 
as  the  manufacturing  plant  itself. 

On  the  other  hand,  when  our  great  railroads 
were  built,  the  whole  projects  were  ventures, 
pure  and  simple,  with  earnings  estimated,  and 
hoped  for,  but  not  realized;  and  yet,  under 
such  circumstances,  the  capital  stock,  as  a  rule, 
was  given  away  to  the  subscribers  of  the  bonds, 
sold  frequently  below  par,  and  it  was  out  of 
the  proceeds  that  the  railroads  were  built  and 
equipped.  Subsequent  defaults,  foreclosures 
and  reorganization,  have  demonstrated  not 


WHAT   COMBINATION   HAS   DONE     155 

only  that  the  capital  stock  had  no  basis  of 
value,  but  that  the  amount  of  the  bonds  them- 
selves, and  the  interest  reserved  on  them,  were 
unjustified. 

The  large  industrial  corporations  have  been 
long  enough  in  evidence  to  make  it  clear  that 
very  many  of  those  who  are  responsible  for 
the  creation  of  these  organizations  have  profited 
by  the  financial  experience  of  railroad  com- 
panies ;  and  have  organized  these  business  cor- 
porations on  a  basis,  where  reorganization  is 
likely  to  be  no  part  of  their  business  history. 

Mistakes  have  been  made,  but  the  com- 
parison between  the  usual  organization  of 
railroads  and  of  so-called  "Trusts"  is  not  by 
any  means  unfavourable  to  the  latter. 

As  a  matter  of  fact,  however,  railroad  prop- 
erties even  as  they  stand  to-day  in  their  re- 
organized form  are  not  nearly  so  good  an  in- 
vestment as  are  the  industrials,  and  their 
only  hope  of  improvement  lies  in  the  extensive 
application  of  the  principle  of  consolidation 
which  has  done  so  much  for  the  industrial 
stocks.  If  the  consolidation  movements  now 
on  foot  by  Mr.  Hill  and  Mr.  Morgan  and  the 
other  great  railroad  men  are  carried  out,  rail- 
road values  will  undoubtedly  be  much  im- 
proved. As  they  stand  to-day,  they  rank,  as  in- 
vestments about  half  as  high  as  the  industrials. 
This  is  shown  by  the  list,  printed  on  the 
next  page,  which,  for  the  purpose  of  this 
article,  I  have  made  up  in  the  same  way  as  the 


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156 


WHAT   COMBINATION   HAS   DONE     157 

industrial  table.  Taking  thirty,  including  the 
best  properties  in  the  market,  they  show  an 
average  rate  of  earnings  on  their  market  value 
of  5.5  per  cent.,  and  on  their  par  of  total  capi- 
tilization  of  5.6  per  cent.  On  the  face  of  it, 
this  would  show  a  very  substantial  situation 
so  far  as  the  railroads  are  concerned,  placing 
them  as  a  whole  above  the  a  level  with  govern- 
ment bonds.  Unfortunately,  however,  the 
average  is  more  a  matter  of  accident  than  of 
anything  else,  as  the  earnings  fluctuate  from 
.7  per  cent,  on  the  market  value  up  to  12  per 
cent.,  and  from  less  than  one-half  of  one  per 
cent,  on  the  par  value  up  to  24  per  cent. 

Surely,  on  this  comparative  showing,  there 
is  no  better  investment  anywhere  than  is 
offered  by  the  industrial  stocks  of  to-day. 
The  cold  figures  disprove  absolutely  the  charge 
of  general  over-capitalization,  so  freely  made 
by  people  who  have  but  a  superficial  knowl- 
edge of  the  situation.  Of  course  there  have 
been  cases  of  over- valuation.  These  stand 
out  very  plainly  in  the  table  of  earnings  re- 
ferred to.  But  the  average  showing  is  far 
ahead  of  that  of  the  railroads. 

To  pretend  that  the  Trust  constitutes  a 
political  or  economic  menace  is  absurd.  In- 
stead of  concentrating  the  wealth  of  the  country 
in  the  hands  of  a  few  people,  consolidations 
have  had  exactly  the  reverse  effect.  Where, 
under  the  old  conditions,  there  were  a  hundred 
stockholders,  there  are  to-day  a  thousand  or 


158  THE  TRUST:    ITS  BOOK 

two  thousand.  Never  before  was  there  such 
a  wide  distribution  of  manufacturing  interests. 
The  great  bulk  of  the  stock  is  held,  not  by  the 
very  rich,  but  by  the  moderately  well-to-do. 
The  control  under  the  new  system  is  not  vested 
as  it  was  under  the  old,  in  the  hands  of  a  few 
abnormally  rich  men,  but  it  rests  with  the 
majority  of  stockholders,  whose  numerical 
strength  is  growing  every  day.  The  danger 
to  the  community  to-day  lies  not  in  the  cen- 
tralization of  manufactures,  in  industrial  con- 
solidations, but  in  the  centralization  of  wealth 
in  the  hands  of  a  few  men.  This  centralization 
was  made  possible  by  the  old  conditions  of 
individualism.  Unfortunately,  the  economic 
ideas  which  prevail  to-day  arrived  so  late  that 
they  have  not  proven  sufficient,  up  to  this 
time,  to  check  the  accumulation  of  great  for- 
tunes by  individuals.  As  the  new  scheme 
works  itself  out  naturally,  such  accumulations 
will,  in  the  future,  be  rare. 

There  is  no  danger,  either  to  the  community 
or  to  business,  in  such  consolidation  as  has 
been  effected  in  the  case  of  the  steel  trust.  Its 
capitalization  is  based  on  solid  properties. 
That  it  runs  into  a  thousand  millions  is  not  a 
cause  for  apprehension,  but  rather  the  reverse, 
for  it  typifies  the  acme  of  scientific  business. 
If,  as  objectors  have  pointed  out,  its  securities 
equal  nearly  one-half  the  amount  of  money 
in  circulation  in  America,  the  country  has 
cause,  not  to  fear,  but  to  rejoice.  Money, 


WHAT    COMBINATION    HAS    DONE      159 

when  based  on  sound  considerations,  as  our 
currency  is  to-day,  is  but  an  expressed  form  of 
wealth.  Stocks  and  bonds  issued  on  a  substan- 
tial basis,  as  are  the  stocks  and  bonds  of  the 
new  steel  combination,  represent  quite  as  much 
an  expressed  form  of  wealth  as  the  currency. 
They  supplement  the  money  in  circulation, 
and,  always  provided  that  they  are  not  the 
mere  output  of  a  printing  press,  serve  as  tokens 
of  valuable  property.  Such  stocks  and  bonds 
are  quite  as  important  an  item  in  the  wealth  of 
a  country  as  its  currency.  As  the  business 
system  of  a  country  expands,  the  need,  rela- 
tively, of  money  grows  less.  Instead  of  the 
actual  interchange  of  gold  and  silver  in  com- 
mercial transactions,  there  comes  a  system  of 
credit.  The  amount  of  business  transacted 
on  credit  in  the  United  States  to-day  is  over 
two  thousand  times  as  great  as  that  transacted 
in  the  exchange  for  gold  and  silver.  As  soon 
as  the  volume  of  trade  mounts  into  great  pro- 
portions, it  is  impossible  to  transact  it  on  the 
basis  of  an  actual  exchange  of  currency.  In- 
stead, every  means  of  exchange  is  utilized. 
Drafts  and  checks  are  the  chief  mediums  now 
known  in  the  commercial  world.  Actual  money 
is  scarcely  ever  passed  from  hand  to  hand.  It 
is  idle,  therefore,  and  absolutely  valueless,  as 
an  object  lesson,  to  set  forth  the  proportion 
that  any  bond  issue  or  stock  issue  bears  to  the 
amount  of  money  in  circulation.  We  have 
passed  the  point  here  in  the  United  States 


160  THE  TRUST:    ITS  BOOK 

where  such  a  statement  carries  any  weight, 
and  we  have  passed  it  because  we  have  grown 
to  such  enormous  proportions  as  an  industrial 
nation.  Not  so  very  long  ago,  it  was  different. 
Then,  a  dollar  in  cash  was  more  important, 
and  it  went  further  because  it  had  more  to  do. 
When  Mr.  Evarts,  at  Mount  Vernon,  in  his 
exquisitely  humorous  defence  of  the  accuracy 
of  the  tradition  that  Washington  had  once 
thrown  a  dollar  from  the  Virginia  shore  to  the 
Maryland  shore  of  the  Potomac,  stated  that 
a  dollar  went  further  in  those  early  days,  he 
may  be  said  to  have  suggested  a  great  truth, 
and  without  being  too  serious,  we  may  not  only 
enjoy  the  delightful  humour,  but  profit  by  it. 

We  traded  in  times  gone  by  on  the  basis  of 
the  money  in  circulation.  The  result  was  often 
disastrous.  It  left  the  country  in  a  position 
where  the  close-fisted  money-lenders  had  the 
market  at  their  mercy  whenever  the  notion 
seized  them,  or  whenever  they  felt  that  there 
was  a  situation,  real  or  imaginary,  that  war- 
ranted a  demand  for  extortionate  interest  rates. 
This  condition  was  a  severe  handicap  to  our 
merchants  and  manufacturers;  but,  despite 
this  fact,  they  managed,  by  their  enterprise 
and  industry,  to  forge  steadily  ahead.  Now, 
owing  to  these  qualities,  and  to  an  economical 
and  conservative  administration  of  their  affairs 
for  the  past  ten  years,  they  are  in  a  stronger 
financial  condition,  and  comparatively  free 
from  the  domination  of  the  money-lender. 


WHAT   COMBINATION   HAS    DONE      161 

And,  as  in  the  case  of  individuals,  so  it  is  in  the 
nation.  Instead  of  depending  upon  the  good 
will  of  the  money-lenders  of  Europe,  instead 
of  trembling,  as  we  used  to  do,  for  fear  that  they 
would  call  their  loans,  we  have  now  reversed 
the  situation.  We  are  no  longer  borrowers 
from,  but  lenders  to,  Europe.  Consequently, 
the  money  market  has  few  terrors  for  us. 
From  a  debtor  nation  we  have  grown  to  be  a 
creditor  nation ;  and  this  is  due  very  largely  to 
the  fact  that  we  are  conducting  our  business 
affairs  over  here  on  the  most  scientific  and 
advanced  basis,  thanks  to  the  industrial  con- 
solidations. 

At  all  times,  there  have  been  found  plenty 
of  people  to  oppose  progress.  The  railroad 
and  the  steamship  and  the  telegraph  and  the 
telephone  all  had  to  make  their  way  in  the 
face  of  violent  opposition  on  the  part  of  sup- 
posedly intelligent  men.  Where  new  economi- 
cal conditions  are  suggested,  the  opposition  is 
invariably  stronger  than  is  met  by  proposed 
new  physical  conditions.  It  is  not  strange, 
therefore,  that  we  should  find  ourselves  face 
to  face  with  men  of  standing  in  the  community 
who  combat  the  introduction  of  a  business  sys- 
tem that  is,  on  its  face,  wholesome  and  profit- 
able to  every  one.  Benefits  arising  from  the 
centralized  management  of  our  industries  are 
not  confined  to  any  one  class  of  people.  The 
greatest  proportion  of  the  benefit  accrues  to  the 
workingman;  but  capital  has  its  share  of  ad- 


162  THE  TRUST:    ITS  BOOK 

vantage  as  well  in  the  new  scheme.  Capital's 
advantage  comes,  not  so  much  in  the  shape  of 
larger  dividends,  as  in  more  certain  dividends, 
The  investor  knows  more  certainly  what  he 
may  expect,  if  the  enterprise  to  which  he  sub- 
scribed is  conducted  on  the  basis  that  is  at  the 
foundation  of  the  new  order  of  things.  There  is 
a  minimum  of  risk,  which  compensates  very 
fully  for  the  sentimental  independence  which 
has  been  lost.  Business  enterprises  are  no 
longer  subject  to  all  sorts  of  unforeseen  contin- 
gencies. The  danger  from  strikes,  lockouts, 
over-production  and  ruinous  competition  is 
largely  eliminated. 

Viewing  the  matter  from  every  standpoint, 
the  business  man  is  benefited  when  he  operates 
as  a  member  of  a  combination  instead  of  as  an 
individual.  His  property  is  in  the  shape  of 
stocks  and  bonds  which  he  can  market  at  a 
moment's  notice,  instead  of  in  the  shape  of  a 
plant,  on  which  it  would  be  impossible  to 
realize  anything  like  its  value  at  a  forced  sale. 
In  case  of  his  death  or  disability,  he  leaves  to 
his  family  a  property  that  runs  along  un- 
interruptedly. 

Another  great  advantage  is  that  a  combina- 
tion can  generally  arrange  to  run  its  vast  fac- 
tories on  full  time.  The  saving  in  production 
in  this  one  item  alone — that  is,  where  a  factory 
is  run  on  full  time  instead  of  half  time — is  from 
4  per  cent,  to  8  per  cent.  Over-production, 
which  is  one  of  the  most  prolific  sources  of  panic, 


WHAT   COMBINATION   HAS   DONE     163 

can  be  largely  prevented  under  the  present 
system,  and  that  without  throwing  any  great 
body  of  workingmen  out  of  employment.  This 
was  made  very  clear  in  the  industries  in  which 
I  am  interested,  during  the  period  of  depression 
from  1893  to  1897.  Although  the  volume  of 
business  fell  off  very  materially  in  those  years, 
our  factories  were  kept  running  and  our  help 
was  regularly  employed  during  all  that  period, 
and  at  the  same  time  our  stockholders  received 
a  fair  return  on  their  investments,  considering 
the  reduction  in  volume  of  goods  turned  out. 
There  were  no  failures.  Without  combination 
at  that  time,  there  certainly  would  have 
been  a  considerable  number  of  very  serious 
failures. 

The  combination  is  stronger  than  the  indi- 
vidual, because  it  can  institute  a  system  of 
credits  that  prevents  any  great  losses  through 
bad  debts.  In  one  industry,  with  which  I  am 
identified,  the  losses  from  this  source  were  re- 
duced, approximately,  from  one  hundred  thou- 
sand dollars  during  the  year  before  consolida- 
tion to  a  thousand  dollars  last  year  on  a  volume 
of  business  amounting  to  $25,000,000.  This 
may  be  a  hardship  to  people  who  have  not  been 
in  the  habit  of  paying  their  debts,  but  I  think 
the  honest  men  in  the  community  will  be  able 
to  bear  it  with  equanimity. 

The  business  man  in  combination  can  take 
advantage  of  cheap  transportation  facilities, 
which,  as  an  individual,  would  be  out  of  his 


164  THE  TRUST:    ITS  BOOK 

reach.  An  excellent  illustration  of  this  is  to  be 
found  in  one  of  the  large  corporations  of  which 
I  am  a  director,  which,  since  consolidation  of 
the  plants  constituting  its  property,  has  built 
a  large  storage  warehouse  at  Chicago.  During 
the  summer  months,  when  the  waterways  are 
open,  freight  rates  to  the  West  are  much  cheaper 
than  they  are  in  the  winter.  This  corporation 
takes  full  advantage  of  this  fact  by  sending  out 
its  goods  for  Western  consumption  during  the 
warm  months,  and  laying  them  down  in  its 
storage  warehouse  in  Chicago.  The  process  of 
distribution  from  this  point  is  comparatively 
simple  and  very  much  more  economical  than 
it  would  be  if  the  stock  had  to  be  transported 
from  the  East  as  orders  were  taken. 

All  these  advantages  redound  directly  to 
the  benefit  of  capital,  but  indirectly  they  re- 
dound to  the  benefit  of  the  consumer.  They 
lessen  the  cost  of  production,  and  the  consumer 
is  bound  to  receive  his  share  in  this  saving. 

Labour  is  immeasurably  benefited  by  the 
new  conditions.  The  tendency  under  natural 
laws  would  be  for  wages  to  gradually  decline 
to  the  level  of  the  wages  paid  in  other  countries, 
but  the  industrial  combinations  have  sustained 
the  wages  of  the  American  wage-earner.  To- 
day, the  tendency  is  to  a  minimum  of  profits 
and  a  maximum  of  wages.  Any  concern  whose 
profits  become  abnormal  at  once  invites  com- 
petition. Naturally,  these  profits  are  reduced, 


WHAT   COMBINATION    HAS    DONE      165 

and  the  consumer,  who  is  the  workingman, 
reaps  the  benefit.  If  the  profits  are  not  suffi- 
ciently abnormal  to  invite  competition,  the 
workingman  again  comes  to  the  front,  for 
he  demands  a  larger  share  of  the  earnings  in 
the  form  of  increased  wages.  In  either  case, 
then,  the  wage-earners,  as  the  great  body  of 
the  community,  reap  the  greatest  advantages 
that  come  out  of  more  economical  production. 

Everyone  knows,  of  course,  that  the  American 
workingman  to-day  earns  higher  wages  than  are 
paid  in  any  other  country.  This  condition  has 
been  made  possible,  not  because  the  American 
employer  is  any  more  liberal  than  his  European 
competitor,  but  because  the  American  work- 
ingman produces  more,  and  he  produces  more 
because  he  has  been  supplied  with  the  most 
perfect  system  of  labour-saving  machinery  on 
earth.  To  supply  this  machinery,  large  capital 
is  necessary.  The  individual  manufacturer, 
standing  alone,  is  not  in  a  position  to  perfect 
his  machinery  in  the  same  measure  as  the  con- 
solidated enterprise.  The  result  is  that  the 
workingmen  benefit  again  in  being  supplied 
under  consolidation  with  superior  tools.  The 
great  body  of  the  American  wage-earners  realize 
the  advantages  that  come  to  them  under  the 
new  order  of  things,  and  as  the  years  go  on  will 
pay  less  and  less  attention  to  the  clamour  of 
the  uninformed,  and  of  the  agitators  who  seek 
notoriety  by  opposition  to  "  trusts.' ' 

The  workingmen  and  their  employers,  in- 


1 66  THE  TRUST:    ITS  BOOK 

stead  of  being  separated  by  the  application  of 
the  new  ideas  of  consolidation,  are  coming  closer 
together.  A  manager,  or  superintendent,  who 
is  responsible  to  a  large  body  of  stockholders 
for  the  successful  operation  of  a  big  plant,  is, 
on  the  whole,  much  more  likely  to  treat  with 
his  men  on  friendly  terms,  where  differences 
arise,  than  is  the  individual  owner  of  the  plant. 
The  latter,  in  many  cases,  will  feel  that  his 
dignity  has  been  outraged  if  his  workmen  pre- 
sume to  find  fault  with  his  management  in  any 
respect.  He  knows  that  he  is  the  court  of  last 
resort,  and  that  any  one  should  dictate  to  him 
as  to  the  method  of  administering  his  own 
property  is  not  to  be  tolerated.  Instead, 
therefore,  of  discussing  grievances,  listening  to 
remonstrances,  and  taking  advice,the  individual 
employer  takes  a  high-handed  course,  and  a 
strike  ensues.  Where,  however,  the  plant  is 
controlled  by  a  combination,  and  the  operator 
is  simply  a  manager  for  this  combination,  no 
matter  how  large  his  holdings  of  stock  may  be, 
he  is  responsible  to  a  higher  court,  the  Board 
of  Directors;  and,  before  inviting  a  strike  or 
a  shut-down,  he  will  exhaust  every  possible 
means  to  arrive  at  a  settlement  with  his  dis- 
affected men.  This  is  almost  invariably  the 
case,  and  the  records  will  show  that  where 
combinations  have  been  effected  strikes  de- 
crease. 

People  generally  will  come  to  realize  very 
soon  that  the  maintenance  of  the  high  standard 


WHAT   COMBINATION   HAS    DONE      167 

of  wages  now  paid  in  the  United  States  is  ab- 
solutely dependent  upon  the  advantages  which 
come  through  superior  organization.  We  are 
to-day  shipping  manufactured  goods  to  coun- 
tries where  the  rate  of  wages  is,  on  the  average, 
40  per  cent,  less  than  our  wage  earners  are  re- 
ceiving. But  we  can  only  do  this  to  advantage 
in  those  industries  that  are  controlled  by  large 
corporations.  Of  our  total  exports  of  manu- 
factured goods,  which  reached  over  four  hun- 
dred million  dollars  last  year,  80  per  cent,  were 
made  by  the  so-called  "trusts."  Articles  not 
made  by  "trusts"  are  being  supplied  almost 
entirely  to  neutral  markets  by  Germany, 
Belgium  and  England,  the  cheap-labour  coun- 
tries. 

America  is  now  in  the  front  in  the  race  for 
industrial  supremacy.  The  main  factor  that 
has  placed  her  there  is  the  system  of  consolida- 
tion. Surely,  such  results  do  not  argue  for  a 
restriction,  but  rather  for  the  continuance  and 
enlightened  development  of  the  system. 


APPENDIX 

I. 

THE  TRUST  AND  REPRESENTATIVE 
OPINION 

REV.  LYMAN  ABBOTT: 

On  this  subject  "let  there  be  light" — not 
heat. 

SENATOR  MARK  HANNA: 

"  That  it  is  necessary  to  have  organized  capi- 
tal is  evident.  It  is  utterly  impossible  for  a 
corporation  to  land  its  product  on  the  shores 
of  another  land,  perhaps  10,000  miles  away, 
place  it  in  storehouses  and  await  the  demands 
of  the  consumer  before  it  is  sold,  unless  there 
is  tremendous  capital  back  of  the  corporation. 
The  combinations  of  capital,  as  I  have  said 
before,  are  no  new  thing  in  foreign  countries. 
That  is  why  they  have  builded  such  splendid 
corporations  and  have  accomplished  such  won- 
derful work  in  foreign  lands.  Let  us  wait  and 
see  how  these  experiments  work.  If  they  are 
bad  they  will  fall  to  pieces  of  their  own  accord. 
If  they  are  beneficial  they  will  continue  to 
grow. " 

169 


i yo  THE  TRUST:    ITS  BOOK 

PRESIDENT  ROOSEVELT: 

"The  machinery  of  modern  business  is  so 
vast  and  complicated  that  great  caution  must 
be  exercised  in  introducing  radical  changes 
for  fear  the  unforeseen  effects  may  take  the 
shape  of  widespread  disaster.  Moreover,  much 
that  is  complained  about  is  not  really  the  abuse 
so  much  as  the  inevitable  development  of  our 
modern  industrial  life.  We  have  moved  far 
away  from  the  old  simple  days  when  each  com- 
munity transacted  almost  all  its  work  for  itself 
and  relied  upon  outsiders  for  but  a  fraction  of 
the  necessaries,  and  for  not  a  very  large  portion 
even  of  the  luxuries  of  life.  Very  many  of  the 
anti-trust  laws  which  have  made  their  appear- 
ance on  the  statute  books  of  recent  years  have 
been  almost  or  absolutely  ineffective  because 
they  have  blinked  the  all-important  fact  that 
much  of  what  they  thought  to  do  away  with 
was  incidental  to  modern  industrial  conditions, 
and  could  not  be  eliminated  unless  we  were 
willing  to  turn  back  the  wheels  of  modern 
progress  by  also  eliminating  the  forces  which 
had  brought  about  these  industrial  conditions. 
.  .  .  What  remains  for  us  to  do,  as  practi- 
cal men,  is  to  look  the  conditions  squarely  in 
the  face  and  not  to  permit  the  emotional  side  of 
the  question,  which  has  its  proper  place,  to 
blind  us  to  the  fact  that  there  are  other  sides. 
We  must  set  about  rinding  out  what  the  real 
abuses  are,  with  their  causes,  and  to  what  ex- 
tent remedies  can  be  applied. " 


APPENDIX  171 

PROF.  R.  MAYO  SMITH,  Columbia  University : 

"It  is  the  duty  of  every  thinking  man, 
not  to  be  carried  away  by  his  first  im- 
pressions nor  to  accept  as  justified  the  outcry 
against  trusts." 

THE  EARL  OP  ROSEBERY: 

"The  Americans,  scarcely  satisfied  with 
gigantic  individual  fortunes,  use  these  by  com- 
bination to  make  of  capital  a  power  which, 
wielded  by  one  or  two  minds,  is  almost  irresisti- 
ble, and  if  this  power  is  concentrated  against 
Great  Britain  in  trade  warfare  it  will  be  a 
danger  we  cannot  afford  to  disregard. 

"A  trust  of  many  millions  might  compete 
with  any  trade  in  England,  underselling  all  her 
products  at  a  considerable  loss.  This  is  a 
possible  outcome  of  the  immediate  future." 

HON.  THOS.  B.  REED: 

"Let  these  agglomerations  of  wealth  take 
one  step  in  prices  beyond  what  is  warranted 
by  the  business  condition  of  the  world ;  just  let 
it  be  known  that  there  are  huge  profits  being 
gained;  then,  as  all  history  shows,  not  only 
will  competition  arise,  but  over-competition, 
which  will  make  for  that  business  which  ap- 
pears the  most  profitable  on  the  list.  Men  are 
not  now  so  short-sighted  as  they  used  to  be; 
fewer  geese  are  killed  that  lay  golden  eggs. 
Men  understand  that  large  profits  mean  over- 
competition  soon  to  come. " 


172  THE  TRUST:    ITS  BOOK 

WM.  MORTON  GRINNELL: 

"The  evolution  of  industry  is  intimately 
allied  to  biological  and  sociological  evolution, 
and  their  correlation  constitutes  the  problem 
of  the  age.  Competition  is  not  in  the  long  run 
the  life  of  trade,  but  death  to  the  weaker.  It 
is  the  brutal  doctrine  of  the  survival  of  the 
fittest,  the  ethics  of  the  savage  beast  and  savage 
man.  The  earlier  exponents  of  evolution  enun- 
ciated this  as  the  law  of  nature,  but  the  later 
and  more  enlightened  philosophers  have  taught 
us  that  harmony  is  the  law  of  the  universe.  If, 
therefore,  men  would  equally  and  honestly 
observe  these  laws  we  should  have  great  indus- 
trial organizations  working  in  absolute  harmony 
for  the  good  of  all.  These  organizations  we 
have,  and  we  call  them  Trusts,  and  the  good 
they  have  done  for  the  people  at  large  is  im- 
mense, while  the  evils,  very  great  indeed,  are 
not  due  to  the  theory  or  system,  but  to  short- 
sighted and  selfish  human  nature. " 

HON.  ABRAM  S.  HEWITT: 

"The  great  corporations  which  have  sprung 
into  existence  within  the  last  ten  years  are  due 
to  an  evolution  which  no  more  can  be  arrested 
than  the  flow  of  the  tries.  They  are  not  in- 
jurious to  the  community  or  to  the  working 
classes.  They  give  more  steady  employment 
and  a  greater  demand  for  labour.  The  wages 
have  been  raised  and  the  prices  of  the  commodi- 
ties produced  have  been  lessened.  All  classes 


APPENDIX  173 

of  the  community  have  been  benefited  by  their 
growth,  except  such  as  have  been  disabled  for 
a  time,  only  to  reappear  in  the  form  of  con- 
solidated organizations  more  profitable  and 
more  advantageous  to  the  community." 

PROF.  EDMUND  J.  JAMES,  University  of  Chicago : 

"  It  looks  as  if  we  are  face  to  face  with  gigantic 
revolutions  in  industry — as  gigantic  in  some 
way  as  those  our  fathers  faced  a  century  ago. 
They,  too,  were  besought  by  all  whose  interests 
were  bound  up  in  the  old  system  to  set  them- 
selves against  the  coming  change.  In  fact, 
it  took  the  French  Revolution  to  sweep  away 
the  relics  of  the  Middle  Ages  and  make  way  for 
the  new  era  in  industry,  as  in  politics.  A  new 
corporate  organization  of  industry  may  be  the 
best  substitute  for  the  present  competitive 
system,  as  the  latter  was  the  necessary  follower 
of  the  corporate  form  characteristic  of  the 
Middle  Ages." 

REV.  DR.  GEORGE  D.  HERRON,  Professor  of 
Applied  Christianity  in  Iowa  College: 

"There  is  in  trusts  a  wholly  divine  and  re- 
sistless force  making  for  co-operation  and  asso- 
ciation. The  law  of  evolution,  working  toward 
the  development  of  a  social  organism  in  which 
humanity  shall  become  the  social  unit  and 
every  individual  a  perfect  member  thereof, 
cannot  be  gainsaid  or  legislated  away.  It  is 
this  positive  force  in  industrial  combination, 


174  THE  TRUST:    ITS  BOOK 

beneath  all  its  monstrous  and  desperate  facts, 
that  should  receive  our  chief  consideration." 

ARTHUR  T.  HADLEY,  President  of  Yale  Uni- 
versity : 

"So  far  as  the  present  tendency  toward  in- 
dustrial consolidation  is  a  financial  movement 
for  the  sake  of  selling  securities,  it  is  likely  to 
be  short-lived.  So  far  as  it  is  an  industrial 
movement  to  secure  economy  of  operation  and 
commercial  policy,  it  is  likely  to  be  permanent. 
Attempts  to  stop  this  tendency  by  law  will 
probably  be  as  futile  in  the  field  of  manufacture 
as  they  have  been  in  that  of  transportation. 
The  growth  of  these  enterprises  creates  a  trust 
in  a  sense  which  is  not  generally  appreciated; 
it  gives  their  managers  a  discretionary  power 
to  injure  the  public  as  well  as  to  help  it.  The 
wise  exercise  of  this  trust  cannot  be  directly 
provided  for  by  legal  enactment;  it  must  be 
the  result  of  an  educational  process  which  can 
be  furthered  by  widened  conceptions  of  direc- 
tors' responsibility.  As  this  process  of  con- 
solidation and  of  education  goes  on,  private 
and  public  business  tend  to  approach  one  an- 
other in  character.  The  question  of  state 
ownership  of  industrial  enterprises,  instead  of 
becoming  an  acute  national  issue,  as  so  many 
now  expect,  will  tend  rather  to  become  rela- 
tively unimportant,  and  may  not  improbably 
be  removed  altogether  from  the  field  of  party 
politics." 


APPENDIX  175 

ALBERT  B.  BOARDMAN: 

"Now,  trusts  are  not  formed,  or,  if  formed, 
they  will  not  continue  for  any  length  of  time, 
unless,  on  the  whole,  they  are  able  to  furnish 
goods  to  the  consumer  at  lower  prices  and  on 
more  favourable  terms  than  the  constituents 
composing  the  trusts,  or  individuals  or  corpora- 
tions not  in  the  trusts.  If,  therefore,  by  legis- 
lation the  business  conditions  are  made  so  un- 
favourable that  a  particular  trust  is  driven  out 
of  business,  it  will  necessarily  follow  that  every 
one  else  engaged  in  the  same  line  of  business, 
working  under  conditions  less  favourable  than 
those  under  which  the  particular  trust  is  work- 
ing, must  go  out  of  business  also.  A  certain 
quantity  of  business  is  therefore  driven  away 
entirely  from  the  country. " 

AARON  JONES,  of  South  Bend,  Ind.,  Master  of 

the  National  Grange: 

"The  first  step  to  be  taken  in  remedial  legis- 
lation is  to  pass  a  well-considered  anti-trust 
law  by  the  Congress  of  the  United  States  de- 
fining the  powers  and  limiting  the  privileges  of 
these  corporations.  And  supplement  this  law 
by  enactments  of  the  several  State  legislatures 
to  apply  to  such  phases  of  the  matter  as  could 
not  be  reached  by  the  United  States  law. 
It  would  seem  that  these  laws  should  provide 
for  government  and  State  inspection  of  their 
business,  of  their  books,  agreements,  receipts 
and  expenditures.  This  inspection  should  be 


1 76  THE  TRUST:    ITS  BOOK 

rigid  and  full,  and  the  rights  of  the  public  pro- 
tected. If  the  corporations  are  conducting 
legitimate  business  no  injury  will  be  done  them 
by  inspection.  They  are  using  the  powers 
granted  to  them  by  the  State  to  crush  out  other 
enterprises,  or  for  illegitimate  political  purposes. 
These  practices  are  most  reprehensible  and 
should  be  punished  by  such  penalties  as  will 
effectually  stop  them." 

BENJAMIN  R.  TUCKER,  New  York: 

"The  right  to  co-operate  is  as  unques- 
tionable as  the  right  to  compete.  The  right 
to  compete  involves  the  right  to  refrain  from 
competition.  Co-operation  is  often  a  method 
of  competition,  and  competition  is  always,  in 
the  larger  view,  a  method  of  co-operation. 
Each  is  a  legitimate,  orderly,  non-invasive  ex- 
ercise of  the  individual  will,  under  the  social 
law  of  equal  liberty,  and  any  man  or  institu- 
tion attempting  to  prohibit  or  restrict  either 
by  legislative  enactment  or  by  any  form  of  in- 
vasive force  is,  in  so  far  as  such  man  or  institu- 
tion may  fairly  be  judged  by  such  attempt,  an 
enemy  of  the  human  race." 

Gov.  PINGREE,  of  Michigan: 

"Most  of  you  know  where  I  stand  with  re- 
gard to  trusts.  I  am  opposed  to  them — always 
have  been.  I  claim  it  is  a  cowardly  way  of 
doing  business.  If  you  cannot  do  business 


APPENDIX  177 

without  being  in  a  trust  I  haven't  any  use  for 
you.     Get  out." 

JOHN    D.    ARCHBOLD,    Vice-President    of   the 
Standard  Oil  Company: 

"Trusts,  or,  speaking  correctly,  large  cor- 
porations, are  the  necessary,  indeed  the  irresisti- 
ble result  of  our  rapidly  growing  commerce. 
In  adopting  them  we  are  but  following  the 
example  of  that  greatest  of  all  commercial 
nations,  England,  under  whose  commercial 
charters  capitalization  and  scope  are  practically 
unlimited.  Any  legislative  restrictions  im- 
posed here  would  operate  alone  to  the  benefit 
of  foreign  commercial  competitors." 

SAMUEL  GOMPERS,  President  of  American  Fed- 
eration of  Labour: 

"Organized  labour  looks  with  apprehension 
at  the  many  panaceas  and  remedies  offered  by 
theorists  to  curb  the  growth  and  development, 
or  to  destroy  the  combinations  of  industry. 
We  have  seen  those  who  knew  little  of  state- 
craft, and  less  of  economics,  urge  the  adoption 
of  laws  to  'regulate'  inter-state  commerce, 
and  laws  to  'prevent'  combinations  and  trusts; 
and  we  have  also  seen  that  these  measures, 
when  enacted,  have  been  the  very  instruments 
to  deprive  labour  of  the  benefit  of  organized 
effort,  while  at  the  same  time  they  have  simply 
proved  incentives  to  more  subtly  and  surely 
lubricate  the  wheels  of  capital's  combination. 


178  THE  TRUST:    ITS  BOOK 

"For  our  own  part,  we  are  convinced  that 
the  State  is  not  capable  of  preventing  the 
development,  or  the  natural  concentration  of 
industry.  All  the  propositions  to  do  so  which 
have  come  under  our  observation,  would,beyond 
doubt,  react  with  greater  force  and  injury  upon 
the  working  people  of  our  country  than  upon 
the  trusts." 

H.  C.  ADAMS,  President  of  Michigan  University: 
"The  vastness  of  this  question  will  be  ap- 
preciated when  it  is  observed  that  its  judicious 
treatment  will  result  in  securing  for  the  people 
the  advantages  of  the  industrial  development 
of  the  past  century,  while  to  ignore  it  or  to  fail 
in  its  solution  would  result  in  prostituting  the 
wealth  created  by  a  hundred  years  of  phenome- 
nal development  to  the  service  of  a  class. 

BYRON  W.  HOLT,  of  the  New  England  Free 

Trade  Bureau: 

"That  the  tariff  by  shielding  our  manufac- 
turers from  foreign  competition  makes  it  easy 
for  them  to  combine,  to  restrict  production  and 
to  fix  prices — up  to  the  tariff  limit — ought  to 
be  evident  to  every  intelligent  man.  It  ought 
also  to  be  evident  to  all  that  the  greatest  ob- 
jection to  trusts  is  due  to  their  ability  to  raise 
prices  above  a  normal,  profit-producing  point. " 

JOHN  F.  SCANLAN,  of  Illinois: 

"Give  the  American  people  limited  time, 
and  if  trusts  should  prove  to  be  against  the 


APPENDIX  179 

interests  of  the  majority,  the  law  will  harness 
them  to  the  people's  interest,  not  by  killing  the 
goose  that  laid  the  golden  eggs,  but  by  regulat- 
ing it." 

CONGRESSMAN  THOMAS  UPDEGRAFF,  of  Iowa: 

"  There  are  abundant  remedies  and  sufficient 
remedies  by  which  aggregations  of  capital  can 
be  controlled  and  made  subservient  to  the  public 
good,  and  whenever  the  American  people  say 
in  earnest  that  the  work  shall  be  done,  it  will 
be  done,  and  the  trusts  will  be  controlled,  and 
we  will  save  what  is  good  in  aggregations  of 
capital  and  control  what  is  bad.  I  don't  care 
whether  the  tariff  is  the  mother  of  trusts  or  not. 
That  doesn't  touch  the  question.  If  the  tariff 
be  in  any  sense  the  mother  of  trusts,  what  will 
you  do?  I  will  tell  you  what  we  will  do,  we 
will  take  care  of  the  mother  and  save  her;  we 
will  raise  her  children  in  the  admonition  and 
nurture  of  the  Lord.  That  is  the  way  to  man- 
age trusts." 

HORATIO  W.  SEYMOUR,  Chicago: 

"  Trusts  need  not  be  more  objectionable  than 
corporations  or  sole  ownership.  They  are  sub- 
ject alike  with  them  to  the  laws.  If  they  vio- 
late the  laws  their  officers  may  be  punished. 
If  they  secure  advantages  under  unjust  laws, 
purchased  in  their  interest,  or  if  they  escape 
the  penalties  of  wise  laws  enacted  to  prevent 
and  punish  crime,  it  is  certain  that  representa- 


180  THE  TRUST:    ITS  BOOK 

tives  of  the  people  in  office  have  betrayed  their 
trust  and  would  have  done  it  as  quickly  if 
the  bribe  giver  had  represented  individuals  or 
had  represented  himself  alone." 

EUGENE  D.  MANN,  of  New  York: 

"Whatever  is  evolved  from  the  natural  se- 
quence of  events  is  right  and  proper,  though 
the  new,  in  comparison  with  the  old,  may 
momentarily  surprise  and  even  shock  us. 
Evolution,  displacements  and  readjustments 
are  always  going  on.  Mankind  never  halts  in 
working  out  its  destiny.  The  aggregation  of 
commercial  wealth  and  the  consolidation  of 
industries  into  what  are  now  spoken  of  as 
trusts,  are  as  natural  and  as  inevitable  a  step 
in  the  march  of  human  progress  as  was  formerly 
the  substitution  of  machinery  for  hand  labour. 
They  mark  similar  periods  of  triumph  for 
brains,  ingenuity  and  experience.  Neither  in- 
novation was  accomplished  in  a  day,  but  each 
has  come  in  its  destined  time  and  order.  The 
whole  problem  is  that  of  continuous  and  ever- 
lasting improvement.  What  could  be  said  of 
the  world's  development  if,  from  generation  to 
generation,  we  adhered  only  to  the  traditions, 
methods  and  institutions  of  the  past?" 

PROF.  JOHN  GRAHAM  BROOKE,  of  Harvard : 

"Men  will  fight  the  trusts  as  they  fought 
machinery  and  with  precisely  the  same  results. 
From  the  United  States  law  of  1890  to  the 


APPENDIX  181 

various  attempts  in  different  States  there  is 
thus  far  no  hint  that  these  colossal  forces  to- 
ward new  organic  forms  can  be  hindered.  I 
believe  it  to  be  the  beginning  of  practical  sense 
to  understand  that  the  new  combinations  can 
in  no  sense  be  permanently  smashed.  The  real 
problem,  immediate  and  imperious,  is  how  to 
regulate  and  guide  the  new  force  that  stands 
merely  for  the  latest  stage  of  industrial  growth." 

DUDLEY  WOOTON,  of  Texas : 

"The  tariff  has  enabled  the  corporate  enter- 
prises and  syndicates  to  establish  and  solidify 
their  tyranny  over  the  country,  and  by  legalizing 
plunder  to  amass  such  immense  capital  as  to 
dominate  the  whole  field  of  commercial  and 
industrial  activity.  After  nearly  forty  years 
of  its  unjust  and  unequal  rapacity,  it  now  hides 
itself  behinds  the  trusts  and  monopolies  of  the 
land  as  behind  the  breastwork  its  own  iniquities 
have  erected." 

WILLIAM  FORTUNE,  President  of  the  Indiana 
State  Board  of  Commerce : 

"  The  evolution  of  organization  has  carried  us 
rapidly  through  the  different  forms  of  progress 
and  co-operative  beneficence,  all  of  which  we 
have  regarded  with  more  of  approbation  than 
apprehension ;  but  now,  when  we  are  confronted 
with  vast  developments,  which  have  come  by 
natural  process  from  social,  industrial  and 
economic  tendencies,  we  awaken  to  the  dis- 


182  THE  TRUST:    ITS  BOOK 

covery  that  we  haye  been  running  with  our 
eyes  shut.  A  startled  cry  of  'danger  ahead' 
echoes  over  the  land,  and  in  the  first  flush  of 
excited  feeling  there  is  a  general  demand  from 
the  people  for  protective  measures.  A  pause 
for  investigation  will  afford  the  best  prepara- 
tion for  averting  whatever  may  be  the  danger 
of  the  future.  Methods  of  co-operation  which 
will  inure  fairly  to  the  benefit  of  any  set  of 
men  will  not,  when  understood,  be  obnoxious 
to  the  public ;  but  when  through  selfishness  and 
greed  there  is  a  perversion  of  these  methods 
that  results  in  fraud,  in  oppression  of  or  exac- 
tions from  one  class  for  the  illegitimate  advan- 
tage of  another  class,  there  is  manifestly  need  for 
the  exercise  of  the  restraining  power  of  govern- 
ment for  the  maintenance  of  equitable  relations 
between  the  people." 

DR.  HOWARD  S.  TAYLOR,  of  Chicago : 

"Whatever  touches  the  question  of  wealth 
production  and  distribution  touches  the  centre 
of  our  civilization  and  invites  from  all  our  peo- 
ple such  counsel  and  action  as  shall  secure  for 
us  and  our  posterity  the  greatest  possible  good. " 

Gov.  G.  W.  ATKINSON,  of  West  Virginia : 

"To  sweep  the  trust  issue  into  politics,  and 
resolve  one  way  or  the  other,  as  is  the  custom 
nowadays  in  political  conventions  so  to  do, 
it  seems  to  me,  is  'wasting  fragrance  on  the 
desert  air.'  We  must  come  nearer  home  for 


APPENDIX  183 

a  remedy  than  that.  We  must  hit  at  its  tap- 
root by  national  and  State  legislation  by  mak- 
ing it  a  penal  offence  against  good  government 
for  men  of  great  wealth  to  combine  for  the  sole 
purpose  of  stifling  and  choking  middle  men 
and  small  dealers,  as  trusts  have  generally  done 
in  the  past.  Or  better  still,  if  the  trusts  would 
take  their  employes  into  their  combines  and 
their  confidence,  and  would,  after  paying  them- 
selves a  reasonable  dividend  on  the  actual 
amount  of  capital  stock  invested,  agree  to  dis- 
tribute a  reasonable  share  of  the  profits  among 
the  skilled  artisans  whom  they  employ  as  a 
per  cent,  of  profit  upon  their  wages,  the  trusts 
would  then  be  placed  upon  an  honest,  popular 
and  reasonable  foundation,  and  no  one  could 
complain  or  justly  oppose  them." 

E.  C.  CROW,  Attorney-General  of  Missouri : 

"  If  the  trust  organizers  could  carry  on  their 
business  through  corporations  with  the  liabili- 
ties of  a  partnership,  the  members  of  the  trust 
would  have  the  same  opportunities  and  equal 
liabilities  with  the  individual  competitor. 
Equality  of  opportunity  and  responsibility  in- 
stead of  special  privilege  would  exist.  State 
statutes  give  a  right  of  action  in  many  in- 
stances for  damages  against  trusts  injuring 
competition  in  efforts  to  control  the  market. 
But  where  the  trust  is  a  corporation,  with  the 
present  liability  attaching  thereto,  the  action 
can  only  be  against  the  corporate  entity  itself. 


184  THE  TRUST:    ITS  BOOK 

But  suppose  the  corporation  and  the  members 
thereof  had  attached  to  them  the  liabilities  of 
the  partnership.  Then  the  right  of  action 
would  be  against  not  only  the  corporation  but 
each  individual  member  of  the  corporation. 
This  fact  would  deter  millionaires  from  becom- 
ing members  of  trade  combinations,  make  men 
cautious  and  keep  down  inflation  of  values  and 
wild  speculation." 

E.    P.    Do  WE,    President   of  the  Commercial 
Traveller's  League: 

"While  trusts  are  for  speculative  purposes 
principally,  they  have  other  sinister  designs; 
organized  first  for  the  money  in  the  deals, 
second  for  a  more  marked  line  of  differentiation 
between  the  few  very  rich  and  the  many  very 
poor,  and,  thirdly,  for  the  virtual  enslavement 
of  labour;  not  for  industrial  economies  and  to 
reduce  the  prices  of  the  commodities  to  the 
consumer;  not  for  the  good  of  the  people,  but 
against  their  welfare,  and  all  claims  by  those 
interested  in  trusts  or  by  their  subservient 
tools  to  the  contrary  are  veritable  lies. " 

The  late  ROSWELL  P.  FLOWER: 

"The  possibilities  of  economy  in  production 
are  enormous.  Recently  some  waggon  manu- 
facturers came  to  New  York  to  organize  for 
the  capitalization  of  their  business.  They 
figured  out  a  reduction  of  one-half  of  their 
travelling  salesmen  by  this  combination.  This 


APPENDIX  185 

and  other  economies  aggregated  nearly  four 
hundred  thousand  dollars,  and  the  net  profits 
of  the  concerns  had  not  amounted  in  the  aggre- 
gate to  more  than  two  hundred  and  fifty  thou- 
sand dollars  within  a  year.  That  is  what  capi- 
tal combinations  are  doing  for  business. " 

PROFESSOR  SUMNER,  of  Yale: 

"We  have  before  us  a  grand  transformation 
of  industrial  methods.  It  is  an  evolutionary 
transition.  It  affects  the  struggle  for  existence 
of  all  living  men.  It  is  vital  to  the  means  of 
livelihood,  the  control  of  economic  resources, 
the  accumulation  of  capital  by  individuals, 
the  prosperity  of  families,  the  education  of 
children;  that  is  to  say  that  it  is  vital  to  the 
nearest  and  dearest  interests  of  every  man  of 
us.  Moreover,  all  the  so-called  'higher  interests' 
(science,  education,  religion,  charity,  reform, 
etc.)  are  dependent  on  wealth-production.  It 
is  not  hypocrisy,  it  is  a  kind  of  antagonism  be- 
tween arbitrary  codes  and  real  motives  which 
keeps  up  such  a  contradiction  between  what 
is  thought  to  be  noble  principle  and  what  is 
really  active  motive.  There  will  be  individ- 
uals who  will  be  led  by  their  notions  about 
current  methods  of  wealth-production  to  go 
out  and  preach  against  it.  There  will  be  sects 
which  will  withdraw  and  live  outside  of  the 
movement  which  they  dislike  and  condemn. 
With  these  exceptions  our  society  will  not  relax 
in  the  least  its  eagerness  to  seize  and  develop 


i86  THE  TRUST:    ITS  BOOK 

every  device  or  principle  which  will  push 
on  wealth-production  with  greater  energy. 
Whether  we  deplore  it  or  not,  we  know  it  for  a 
fact  that  this  eagerness  is  the  leading  character- 
istic of  our  people  and  our  time.  If  then,  big 
industrial  combinations  will  increase  wealth- 
production,  that  will  be  the  controlling  con- 
sideration in  regard  to  them.  There  can  be 
no  further  question  except  in  regard  to  safe- 
guards and  regulations." 

JAMES  B.  DILL,  New  York: 

"The  industrial  movement  of  to-day  is  of 
the  highest  order  and  is  progressing  in  the 
right  direction.  It  has  been  productive  of 
great  good  to  this  country.  It  is  a  direct  con- 
tributing factor  to  the  commercial  supremacy 
of  the  United  States. " 

HON.  CHAUNCEY  M.  DEPEW: 

"As  I  look  at  it,  the  trust  is  on  trial.  If  it 
proves,  like  the  corporation,  to  be  inoppressive, 
and  a  necessity  to  the  conduct  of  certain  opera- 
tions which  are  for  the  public  good,  it  will  live. 
If,  on  the  other  hand,  it  oppresses  the  people, 
they  will  very  quickly  put  a  stop  to  it.  If  it 
violates  public  sentiment,  it  cannot  live — if, 
I  mean,  it  puts  into  the  hands  of  a  few  men 
the  manufacture  or  distribution  of  any  article 
of  prime  necessity,  so  that  the  American  people 
feel  that  they  are  dependent  on  any  set  of  men 
for  coal  or  steel  or  anything  which  is  in  uni- 
versal use." 


APPENDIX  187 

HENRY  O.  HAVEMEYER: 

"Corporations,  whether  directly  such  or  in 
the  form  of  trusts,  are  an  expedient  for  uniting 
the  interests  of  a  large  number  of  persons  of 
smaller  means  into  a  large  aggregation  of  capi- 
tal. Attack  upon  them  is,  therefore,  an  at- 
tack upon  their  stockholders.  In  the  case  of 
many  well-conducted  corporations  these  stock- 
holders are  very  numerous,  and  are  often  per- 
sons of  moderate  means,  dependent  upon  their 
income  for  their  support.  In  the  absence  of 
all  disturbing  causes,  the  direct  tendency  of  a 
combination  of  capital  is  to  promote  economy, 
reduce  expenses  and  diminish  prices.  This 
does  not  mean  that  a  person  having  anything 
to  sell  will  not  get  for  it  the  largest  price  that 
he  can.  It  means  that  with  the  abundance  of 
capital  ready  for  investment  which  is  always 
found  everywhere,  the  only  way  to  prevent 
competition  is  to  keep  prices  below  the  com- 
petitive point. " 

HON.  W.  BOURKE  COCKRAN: 

"As  every  device  which  facilitates  the  in- 
dustrial co-operation  of  men  promotes  the 
volume  of  production,  corporations  possess 
enormous  capacity  for  swelling  the  tide  of 
human  prosperity,  and  they  have  promoted 
the  well-being  of  every  community  in  which 
they  have  been  encouraged,  in  spite  of  the  fact 
that  the  management  of  corporations  has  been 
the  blackest  page  in  all  our  history. '' 


1 88  THE  TRUST:    ITS  BOOK 

GEORGE    E.    ROBERTS,  Washington;  Director 

of  U.  S.  Mint: 

"To  escape  from  the  pressure  of  conditions 
which  have  been  making  industrial  investments 
precarious  and  unprofitable  to  the  majority  of 
operators,  the  latter  have  resorted  to  the  com- 
binations. If  the  natural  forces  of  the  business 
world  have  a  levelling  influence  and  have  for  all 
time  been  steadily  lifting  manual  labour  in 
importance  as  compared  to  capital,  why 
should  it  be  believed  that  the  latter  can,  by  any 
new  scheme  hatched  in  back  offices,  suddenly 
rise  to  mastery?  Is  it  not  a  little  singular 
that  a  movement  to  which  capital  is  driven  by 
distress  should  excite  such  widespread  fear 
that  capital  is  about  to  become  all-powerful? 
The  reduction  in  the  earnings  of  capital  in 
the  past  has  come,  we  have  seen,  through  the 
increase  in  the  amount  of  capital  seeking  in- 
vestment and  through  the  inventions  which 
have  reduced  the  amount  required  per  unit  of 
production.  Will  that  law  cease  to  operate 
in  the  future?  The  production  of  wealth  is 
now  going  on  in  this  country  at  an  unprece- 
dented rate.  The  amount  available  for  in- 
vestment is  increasing  rapidly  every  year.  It 
will  persistently  seek  investment,  and  all  at- 
tempts to  exclude  it  from  employment  by 
fencing  up  the  several  fields  of  industry  for 
quiet  private  possession  by  a  few  with  extra- 
ordinary returns  for  their  capital  are  inevitably 
doomed  to  failure." 


APPENDIX  189 

CHARLES  W.  FOSTER,  former  Governor  of  Ohio : 
"The  evolution  in  business  from  the  indi- 
vidual to  the  partnership,  and  from  the  partner- 
ship to  the  corporation,  was  no  more  natural 
and  necessary  than  is  the  evolution  from  the 
corporation  to  the  trust.  Let  us  look  the 
situation  squarely  in  the  face.  Denounce  it 
as  we  may,  it  has  come  to  stay.  Why?  Be- 
cause the  gigantic  business  operations  of  the 
present  and  future  cannot  be  carried  on  without 
it.  Through  the  trust  the  enormous  waste 
that  is  entailed  upon  business  operations  by 
competition  is  saved;  the  product  and  the 
service  performed  is  cheapened.  Labour  will 
have  better  opportunity  to  enhance  wages  and 
to  shorten  its  hours  of  toil,  as  is  so  signally 
illustrated  in  the  railroad  service  of  the  coun- 
try. Through  the  trust  the  superior  inven- 
tive genius  of  our  people  (because  of  universal 
education)  will  have  improved  opportunity. " 

PROFESSOR  JOHN  BATES  CLARK,  of  Columbia 

University : 

"It  is  well  worth  while  to  notice  how  much 
will  be  gained  if  we  can  safely  allow  the  natural 
and  centralizing  tendency  to  go  on.  It  means 
the  survival  of  the  most  productive  forms  of 
business.  It  is  first  and  chiefly  because  they 
can  give  more  for  a  dollar  than  little  establish- 
ments can  give  that  the  great  establishments 
supplant  them.  They  out-do  the  small  ones 
in  serving  the  public,  and  this  power  of  superior 


THE  TRUST:    ITS  BOOK 

service  is  soon  to  have  a  new  and  unique  field 
in  which  to  display  itself.  We  are  entering 
on  an  era  of  world-wide  industrial  connection. 
Asia  and  Africa  are  incorporating  themselves 
into  the  economic  organism  of  which  Europe 
and  America  are  the  centre.  There  is  coming 
a  neck  and  neck  contest  between  European 
countries  and  the  United  States  for  lucrative 
connections  with  the  outlying  regions.  There 
is  also  coming  a  later  and  grander  contest  be- 
tween both  America  and  Europe  on  the  one 
hand,  and  Asia  and  Africa  on  the  other,  for 
the  command  of  the  traffic  of  the  world.  In 
this  contest  victory  involves  more  than  any 
hurried  expressions  of  mine  can  indicate.  It 
means  a  leading  position  in  the  permanent 
progress  of  the  world.  It  means  positive 
wealth,  high  wages,  and  intellectual  gains  that 
cannot  be  enjoyed  by  those  who  develop  less 
power. " 

PAUL  MORTON,  Third  Vice-President,  Atchison, 
Topeka  &  Santa  Fe  R.  R. : 

"I  believe  that  trusts  will  regulate  them- 
selves. Any  attempt  to  keep  prices  higher 
than  they  ought  to  be  is  a  direct  bid  for  com- 
petition, and  capital  always  stands  ready  for 
new  industries  to  manufacture  products  which 
can  be  sold  at  abnormally  high  prices.  Many 
of  those  who  have  tried  it,  say  they  like  nothing 
better  than  to  compete  with  a  combination 
that  is  trying  to  get  unreasonable  profits. '' 


APPENDIX  191 

J.  STERLING  MORTON,  of  Nebraska,  formerly 
Secretary  of  Agriculture: 

"There  is  much  misapprehension  as  to  in- 
corporated capital  in  the  United  States.  Ora- 
torical vagarists  have  endeavoured  to  make 
common  people  believe  that  incorporations 
are  not  subject  to  economic  laws  of  competi- 
tion, and  that  the  relation  of  supply  to  de- 
mand is  not  the  sole  regulator  of  values.  The 
fact,  however,  remains  that  money  invested 
in  manufactories  or  in  railroads  belonging  to 
incorporations  is  no  stronger,  no  better  and  no 
more  exempt  from  the  operation  of  commercial 
laws  than  the  money  which  is  owned  by  indi- 
viduals. There  need  be,  in  my  judgment,  no 
apprehension  as  to  the  trusts  crushing  out  all 
competition." 

CLEM  STUDEBAKER,  of  South  Bend,  Indiana  : 

"It  is  folly  to  talk  of  restraining  legitimate 
combinations.  There  is  scarcely  a  corner 
grocery  in  the  land  that  is  not  witness  to  a 
combination  of  money  and  brains,  a  combina- 
tion for  the  mutual  benefit  of  the  combined. 
The  whole  country  is  built  up  of  combinations. 
They  exist  alike  in  society,  in  government  and 
in  business,  and  it  is  as  futile  and  senseless  to 
talk  about  restrictions  in  this  particular  as  it 
would  be  to  undertake  to  make  Niagara  flow 
up  stream  into  Lake  Erie. " 


192  THE  TRUST:    ITS  BOOK 

PROFESSOR  GEORGE  GUNTON,  President  of  the 
Institute  of  Social  Economics: 

"Trusts,  instead  of  being  sudden  monopo- 
listic creations  that  have  been  sprung  on  the 
community  by  a  few  designing  conspirators, 
are  but  the  last  link  in  an  industrial  chain  more 
than  a  century  long;  they  are  no  more  revolu- 
tionary than  any  one  of  the  previous  links, 
and  less  so  than  some  of  the  earlier  ones.  Each 
one  of  these  links  in  the  great  chain  of  industrial 
evolution  came  and  stayed  only  because  it  was 
more  profitable  than  its  predecessors  to  those 
who  employed  it,  lessened  the  cost  of  produc- 
tion and  served  the  community  more  cheaply. 
Had  it  not  done  this,  it  could  not  have  sustained 
itself  in  competition  with  the  old  methods. " 

DAVID    Ross,    Secretary    Illinois    Bureau    of 
Labour  Statistics: 

"When  the  great  railroads  organized  years 
ago  the  apprehension  prevailed  that  rates 
would  be  advanced,  and  the  calamity  prophets 
of  that  day,  like  the  present,  were  painfully 
realistic  in  describing  the  fate  that  was  to 
destroy  us.  Transportation  charges  for  freight 
are  less  by  two-thirds  now  than  they  were 
prior  to  the  organization,  with  a  corresponding 
improvement  in  the  service. " 

HENRY  W.  BLAIR,  former  U.  S.  Senator  from 
New  Hampshire: 

"It  is  frequently  observed  that  the  trusts 
are  a  natural  development  of  the  protective 


APPENDIX  193 

tariff,  and  the  strong  prejudice  against  the 
evils  which  appear  to  be  flowing  from  them  is 
used  as  an  argument  against  the  protective 
system.  That  is  to  say,  the  existence  of  the 
trust  is  an  argument  for  free  trade.  The  ordi- 
nary and  perhaps  sufficient  reply  to  this  asser- 
tion is  the  fact  that  the  trust  exists  in  free- 
trade  countries  as  well  as  in  our  own.  This 
fact  is  in  itself  conclusive  that  the  trust  does 
not  originate  in  protection.  It  must  be  re- 
membered that  trusts  are  international  already, 
and  if  unrestrained  the  tendency  of  capital  to 
combine  will  become  world-wide." 

W.  W.  POTTER,  member  of  the  Pennsylvania  Bar : 

"To  the  community  as  a  whole,  large  cor- 
porations are  neither  injurious  nor  dangerous. 
On  the  contrary,  the  economies  effected  by  the 
concentration  of  capital  and  its  direction  by 
competent  management  means  always  the 
cheapening  of  commodities  to  the  public. " 

WILLIAM  DUDLEY  FOULKE,  of  Indiana: 

"The  numerous  laws  which  have  already 
been  enacted  to  break  up  trade  agreements, 
pools,  and  technical  trusts,  have  been  ineffec- 
tive. They  have  resulted  in  the  organization 
of  larger  corporations  which  are  more  perma- 
nent and  more  dangerous  in  their  character 
than  the  things  which  are  prohibited  by  statute. 
If  it  were  possible  to  break  up  these  corpora- 
tions, which  may  well  be  doubted,  the  men 
who  compose  them  would  unite  perhaps  in 


194  THE  TRUST;    ITS  BOOK 

partnerships  or  other  forms  of  union  to  accom- 
plish the  same  objects.  If  you  break  up  these 
there  are  infinite  varieties  of  organization 
which  will  take  their  place.  The  tendency 
of  men  to  associate  for  the  accomplishment 
of  a  common  purpose  is  like  the  law  of  gravita- 
tion, and  no  statute  will  be  found  effective 
against  such  a  tendency. " 

A.  LEO  WEIL,  member  of  the  Pennsylvania  Bar: 

"  Large  capitalization  is  a  relative  term,  and 
considered  with  reference  to  the  present  trade 
conditions,  the  capital  employed  is  not  larger 
than  is  necessary  successfully  to  carry  on  such 
enterprises.  Consolidations  are  the  out-growth 
and  the  symptom  of  the  advancing  civilization 
of  to-day,  and  the  inevitable  tendency  of  its 
complex  trade  conditions. " 

SIR  RICHARD  TANGYE,  the  English  Iron  Master: 

"America  will  one  day  awake  to  the  stern 
reality  of  the  evil,  and  when  its  terrible  nature 
is  fully  realized  some  strong  legislation  must 
follow.  I  believe  if  legislation  does  not  step  in 
and  treat  these  men  as  it  would  treat  other 
deadly  enemies  of  the  State,  there  will  be  such 
an  uprising  in  the  States  as  has  not  been  since 
the  accession  of  Abraham  Lincoln  to  supreme 
power.  There  is  no  tyranny  in  the  world  to  be 
compared  with  the  tyranny  of  the  active, 
scheming  gold  tyrant.  It  is  inconceivable  that 
70,000,000  free  Americans  will  bend  their  necks 


APPENDIX  195 

to  such  a  sordid  despotism.     If  they  do,  they 
will  deserve  to  be  enslaved. " 

MR.  RUSSELL  SAGE: 

"The  great  railroad  combinations  we  have 
had  thrust  on  us  recently  I  consider  only  less 
dangerous  than  the  industrial  combinations, 
because  they  are  based  on  sounder  considera- 
tions. Their  stock  and  bonds  have  not,  in 
general,  been  doubled  or  trebled,  nor  unduly 
inflated.  But  they  are  bad,  nevertheless. 
They  are  sure  to  arouse  the  people.  And  the 
people,  once  aroused,  are  more  powerful  than 
the  railroad  combinations. " 

EDWARD  ATKINSON,  of  Boston: 

"There  are  some  other  combines  where  there 
is  very  little  water,  if  any ;  where  there  has  been 
great  economy  in  doing  the  work,  and  which 
are  managed  with  great  skill  at  lessened  cost 
and  lower  prices  relatively;  they  have  a  right 
to  stay.  I  do  not  like  the  methods  of  some  of 
them,  but  there  might  have  been  no  possibility 
of  the  low  prices  that  have  prevailed  either  for 
oil  or  for  sugar  or  for  some  other  articles  except 
on  an  organization  and  combination  of  the 
ablest  possible  men  working  on  a  very  big 
scale  for  the  least  possible  margin  of  profit. 
The  same  in  the  combination  of  railroads.  Fol- 
low the  combination  of  railroads  from  the  time 
when  Vanderbilt  organized  the  first  system 
and  you  find  there  has  been  a  steady,  consecu- 


196  THE  TRUST:    ITS  BOOK 

live  reduction  in  the  freight  charge,  increase 
of  quantity  moved,  lessened  margin  of  profits, 
higher  wages  for  the  engineers  and  workmen, 
and  general  benefit  to  the  public.  I  think  all 
those  things  work  out  by  natural  laws,  but  I 
do  think  that  in  many  cases  the  existence  of  a 
protective  duty  helps  to  maintain  a  trust  that 
ought  not  to  have  that  influence;  all  trusts 
ought  to  be  made  subject  to  competition  with 
the  world. 

JAMES  LOGAN,  General  Manager  of  the  United 
States  Envelope  Company: 

"That  there  is  danger  to  the  State  in  the 
combination  is  a  preposterous  idea.  On  the 
contrary,  the  well  managed  combination  is  a 
distinct  gain  to  the  State.  Any  one  who  doubts 
this  need  only  consult  the  foreign  newspapers. 
Everywhere,  he  will  find  a  cry  of  industrial 
alarm  levelled,  not  at  the  individual  American 
manufacturer,  but  at  the  American  nation. 
This  is  because  the  combination  has  done  for 
the  American  State  what  the  individual  was 
never  able  to  do — put  it  in  industrial  control 
of  the  world.  A  system  that  in  a  few  years  can 
do  this  ought  certainly  to  be  encouraged,  and 
as  it  benefits  the  State  it  necessarily  benefits 
the  individuals  who  make  up  the  State." 

JOHN  M.   STAHL,   Secretary  of  the  Farmers' 

National  Congress: 

"  Trusts  are  the  latest  devices  for  doing  things 
in  a  large  way.  They  are  the  latest  advance 


APPENDIX  197 

in  a  steady,  persistent  movement  that  has 
dominated  the  industrial  development  of  the 
last  one  hundred  years ;  that  has  gathered  the 
isolated  workers  with  tools,  working  alone, 
into  shops,  and  then  has  brought  a  score  of 
shops  into  a  factory,  and  has  then  combined 
factories.  While  thus  developing  the  factory 
system  until  the  result  has  been  well  termed 
an  industrial  revolution,  it  has  none  the  less 
worked  a  similar  revolution  in  merchandising, 
in  transportation,  and  in  yet  other  lines  of 
human  activity;  always  resistlessly  absorbing 
and  combining  to  put  more  men  and  greater 
means  under  the  control  and  direction  of  the 
masterful  brain  that  has  reached  the  place  it 
occupies  by  a  civil  service  indisputably  based 
on  merit ;  truly  a  'natural  selection'  in  industry, 
always  having  for  its  object  doing  things  in  a 
larger  way,  because  it  is  constantly  proved  that 
this  is  doing  things  in  a  more  economical  way 
(whether,  all  things  considered,  it  is  the  best 
way,  I  cannot  discuss  here).  Hence  the  trust 
is  a  logical  phenomenon  in  this  industrial  devel- 
opment. " 

HENRY  WHITE,  Secretary  of  the  United  Gar- 
ment Workers  of  America: 

"The  industrial  combinations  known  as 
trusts  have  so  entrenched  themselves  in  our 
economic  system  that  it  is  not  so  much  a  ques- 
tion now  as  to  how  they  can  be  suppressed,  but 
what  the  public  attitude  should  be  towards 


198  THE  TRUST:    ITS  BOOK 

them,  and  whether  and  how  they  should  be 
regulated   for  the  public  benefit.     They  are 
already  a  phase  of  our  industrial  development, 
and  being  here  have  at  least  some  presump- 
tion in  their  favour ;  but  they  are  not  yet  suffi- 
ciently established  to  give  them  the  sanction  of 
time  and  experience.    They  have  just  forced 
their  way  into  the  arena  of  public  activity. 
The  benefits  derived  by  the  community  from 
them     still     require    demonstration,    likewise 
adequate  proof  as  to  the  dangers  attending 
their  existence.     Simply  citing  cases  showing 
abuses  is  no  indictment  against  the  method 
itself.     We  must  distinguish  between  the  use 
and  abuse  of  a  thing,  otherwise  no  human  in- 
stitution could  stand.     While  pointing  out  the 
evils  of  trusts  we  must  not  forget  the  serious 
grievances  of  competitive  business — its  limita- 
tions, its  wastes,  its  uncertainties.     Working- 
men  are  only  too  familiar  with  the  dishearten- 
ing reply  when  asking  for  an  increase  of  wages, 
'Can't  afford  it  on  account  of  competition.' 
The  trust  method,  at  least,  changes  that  situa- 
tion so  far  as  ability  to  concede  better  condi- 
tions is  concerned." 

SAMUEL  M.  JONES,  Mayor  of  Toledo,  Ohio  : 

"The  triumph  of  the  trust  is  one  of  the  mar- 
vels of  the  closing  years  of  the  nineteenth  cen- 
tury; but  they  are  an  economic  development, 
strictly  in  the  line  of  progress,  and  our  problem 
is  not  how  to  destroy  them,  but  how  to  use 


APPENDIX  199 

them  for  the  good  of  all.  Like  their  prototype, 
the  labour-saving  machinery  of  wood  and  iron, 
they  have  come  to  stay.  A  labour-saving 
machine  might  have  great  value  on  account 
of  its  producing  capacity,  but  might  be  so  de- 
structive of  human  life  as  to  make  it  imperative 
that  it  should  be  so  improved  that  its  'saving' 
power  might  be  utilized  without  injury  to  the 
operative.  Thirty-five  years  ago  I  saw  a  mob 
of  teamsters  trying  to  destroy  the  first  pipe  line 
'  ever  built  for  the  transportation  of  oil.  They 
feared  that  the  pipe  line  was  an  attack  upon 
their  craft.  The  movement  against  the  trusts 
rests  identically  on  the  same  moral  basis  as  the 
rage  of  a  mob  against  the  pipe  line,  elevators 
and  labour-saving  machinery  generally,  and  I 
predict  that  it  will  have  the  same  result  in  the 
end.  All  the  legislation  thus  far  against  the 
trust  has  been  almost  as  futile  as  a  law  against 
the  change  in  the  moon's  phases  or  the  ebb 
and  flow  of  the  tides.  We  are  not  going  back 
to  the  individualistic  method  of  production. 
We  are  not  going  to  pull  down  the  department 
stores  in  order  that  the  people  shall  sustain 
fifty  small  stores  in  place  of  the  one  department 
store.  If  that  is  what  we  propose,  let  us  con- 
tinue the  principle ;  destroy  the  small  stores  and 
turn  the  business  over  to  the  peddlers.  This 
will  be  carrying  to  logical  conclusion  the  sense- 
less objection  to  the  department  store  and  the 
trusts.  The  trust  is  preparing  the  way,  show- 
ing society  the  great  benefits  that  may  be  de- 


200  THE  TRUST:    ITS  BOOK 

rived  through  association  in  industry  and  the 
great  economic  value  of  association,  both  in 
production  and  distribution.  An  invention 
that  lightens  the  burden  of  the  world's  toilers 
and  makes  it  possible  for  one  man  to  do  the 
work  of  twelve  is  a  'labour-saving  machine.' 
Does  it  matter  whether  the  machine  is  made 
of  wood  and  iron  or  composed  of  organizations 
and  associations  of  men  ?  If  the  result  is  the 
same  it  is  a  labour-saving  machine.  In  this 
sense  the  trust  is  a  labour-saving  machine. " 

UNITED   STATES   INDUSTRIAL  COMMISSIONERS' 
REPORT  TO  CONGRESS,  February,  1900: 

"Industrial  combinations  have  become  fix- 
tures in  our  business  life.  Their  power  for  evil 
should  be  destroyed  and  their  means  for  good 
preserved." 

EDWARD  KEASBY,  of  New  Jersey : 

They  have  been  the  means  of  the  co-opera- 
tion of  individuals  and  the  carrying  on  of  large 
undertakings.  They  have  accomplished  too 
much  for  this  country  to  be  destroyed.  It  may 
turn  out  that  some  day  great  corporations  will 
organize,  well  managed,  conservative  and 
steady,  free  from  the  dangers  of  bitter  compe- 
tition, regulating  prices  according  to  demand, 
which  will  have  the  investment  of  all  the  people 
of  the  country,  so  that  there  will  be  a  means  of 
safe,  steady  investment,  such  as  no  ordinary 


APPENDIX  201 

business  corporation  is  now,   because  of  the 
danger  of  sudden  destruction." 

ED.  W.  BEMIS,  New  York  Bureau  of  Economic 
Research : 

"  The  trust  problem,  like  the  slavery  question, 
will  take  a  generation  or  more  to  settle,  and, 
like  the  slavery  question,  will  entail  endless 
trouble  unless  approached  intelligently  and 
with  deep  conscientious  devotion  to  the  public 
weal." 

M.  M.  GARLAND,  former  President  of  the  Amal- 
gamated Association  of  Iron  and  Steel 
Workers : 

"The  working  people  are  appealed  to  in  al- 
most every  State  to  urge  the  passage  of  some 
pet  measure  of  certain  representatives  to  law- 
making  bodies  which  propose  to  crush  out 
trusts  and  combinations,  and  while  it  may  be 
that  labour  unions  do  not  possess  the  skill,  cun- 
ning and  capability  of  trusts,  to  defeat  the  aim 
of  the  enactment,  it  is  certain  that  the  applica- 
tion of  such  legislation  has  found  its  final  and 
only  target  to  be  the  labour  union.  Future 
anti-trust  legislation  must  be  drawn  with  a  full 
knowledge  of  whether  it  is  intended  to  cover  the 
evils  claimed  by  its  title,  or  whether  it  is  to  re- 
strict the  efforts  of  the  workman  in  the  organi- 
zation of  his  fellow  men. 

"Thus  far,  in  this  new  day  of  trusts,  the 
workmen  in  rolling  mills  find  their  inclination 


202  THE  TRUST:    ITS  BOOK 

is  to  treat  with  organizations.  Annual  wage- 
scale  agreements  were  presented  by  our  repre- 
sentatives and  conferences  arranged  promptly. 
An  advance  in  wages  ranging  from  10  to  25 
per  cent.,  in  different  departments,  was  se- 
cured, and  further  advances  in  wages  seem  as- 
sured by  reason  of  advances  in  prices  of  material 
and  product,  which  is  one  of  our  agreements. " 

ATTORNEY-GENERAL  GAITHER  : 

"Modern  monopolies  or  trusts  claim  no  pro- 
tection from  the  law;  on  the  contrary,  they 
simply  ask  that  they  shall  not  be  interfered 
with,  relying  upon  the  crushing  power  of  the 
exclusive  privileges  which  their  own  control  of 
great  aggregations  of  capital  has  obtained  for 
their  flourishing  existence.  The  old  monopoly 
was  a  creature  of  the  law,  the  modern  trust 
seeks  to  establish  itself  without  legislative  as 
sistance,  and  in  many  instances  in  defiance  of 
express  enactments.  It  is  manifest,  therefore, 
that  present  constitutional  prohibitions  against 
monopolies  do  not  touch  the  modern  type  of 
these  dangerous  elements  in  the  business  world 
—that  a  prohibition  on  the  sovereign  power 
from  creating  an  exclusive  privilege  in  business 
cannot  prevent  such  privileges  from  being  ex- 
ercised when  acquired  by  means  independent  of 
the  sovereign  itself.  We  must  consequently 
look  for  the  machinery  to  properly  deal  with 
these  new  creations  of  modern  industrial  life 
in  new  legislation  applicable  to  the  new  phe- 


APPENDIX  203 

nomena,  and  not  in  any  attempt  at  adaptation 
of  old  principles  which  were  meant  to  apply  to 
practically  opposite  conditions." 

Louis  F.   POST,   of  the  National  Single-Tax 

League : 

"  Trusts  are  buttressed  by  protection  or  have 
direct  special  privileges,  like  railways,  or  pecu- 
liar land  advantages.  In  the  last  analysis  trusts 
cannot  be  perpetuated  unless  they  come  to  own 
the  natural  sources  of  supply  and  distribution 
— the  land.  Like  Antaeus,  they  must  have 
their  feet  upon  the  ground.  And  it  is  only  by 
forcing  their  feet  off  the  ground  that  we  can  de- 
stroy them.  Abolish  the  tariff,  abolish  all 
monopolies  that  can  be  abolished,  take  public 
highways  for  public  use  and  collect  from  land 
owners  the  annual  value  of  their  special  ad- 
vantages— do  that  and  you  put  an  end  to  the 
trust.  You  cannot  do  it  in  any  other  way. " 

THOMAS  J.  MORGAN,  of  Chicago : 

"  We  socialists  rejoice  that  the  trust  has  come 
to  show  you  that  the  logical  sequence  of  the 
ownership  and  control  of  what  is  now  known 
as  private  property  and  the  resources  of  the 
earth — all  you  business  men  and  members  of 
the  great  middle  class  have  to  make  up  your 
minds — that  the  private  property  of  this  great 
country  and  others  like  it,  as  our  friend  has  said, 
will  be  organized  into  trusts  until  there  will  be 
one  trust  and  you  will  not  be  in  it.  You  can 


204  THE  TRUST:    ITS  BOOK 

send  bands  of  music  to  your  legislatures;  you 
can  pass  resolutions ;  you  can  hold  your  demon- 
strations everywhere,  but  the  concentration  of 
private  property,  the  right  of  man  to  own  all 
he  can  get  and  hold  all  he  gets,  will  go  on  with 
irresistible  force  so  long  as  the  principle  of 
private  property  in  the  things  by  which  we  live 
is  maintained  by  you  men. " 

JOHN  W.  HAYES,  Secretary  and  Treasurer  of 
the  Knights  of  Labour: 

"To  sum  up  the  whole,  this  policy  of  the 
trusts  is  an  aggressive  invasion  organized 
against  the  best  interests  of  society  and  de- 
structive to  our  free  institutions  and  popular 
government.  It  is  too  often  the  instigation  of 
fraud,  corruption,  bribery  and  treason.  It  is 
the  ally  of  despotism,  tyranny,  mercenary 
selfishness  and  slavery,  and  is  the  enemy  of 
the  elevation  of  the  race  and  the  equality 
of  man. " 

ED.  ROSEWATER,  Editor  of  Omaha  Bee: 

"  We  are  confronted  by  grave  problems  gen- 
erated by  the  industrial  revolution  of  the  nine- 
teenth century.  The  trust  is  but  the  outgrowth 
of  natural  conditions.  The  trend  of  modern 
civilization  is  toward  centralization  and  con- 
centration. This  tendency  is  strikingly  ex- 
hibited in  the  congestion  of  population  in  large 
cities,  the  building  of  mammoth  hotels,  tene- 
ment blocks,  sky-scraper  office-buildings,  the 


APPENDIX  205 

department  store  and  colossal  manufacturing 
plants.  The  monopolistic  combinations  of  cor- 
porate capital  known  as  trusts  have  their  origin 
in  over-production  and  ruinous  competition. 
Honestly  capitalized  and  managed,  with  due 
regard  for  the  well-being  of  their  employes, 
and  operated  economically  for  the  benefit  of 
consumers  of  their  product,  these  concerns 
are  harmless." 


II. 

THE  TRUST  IN  OPERATION 

THE  following  excerpts  from  the  testimony 
given  by  Mr.  Charles  R.  Flint,  before  the 
United  States  Industrial  Commission,  in  March, 
1900,  have  a  special  value  as  the  unstudied 
opinion  of  a  great  "trust-builder."  They 
also  describe  the  effect  of  industrial  combina- 
tion as  seen  in  actual  operation,  thus  serving 
as  practical  illustrations  of  the  theories  con- 
tained in  the  preceding  essays. 

WASHINGTON,  D.  C.,  April,   1901. 

The  commission  met  at  10.46  a.  m.,  Mr.  Farquhar 
presiding.  Mr.  Charles  R.  Flint  was  introduced  as  a 
witness,  and,  being  duly  sworn,  testified  as  follows: 

Q.  (By  Mr.  JENKS.)  You  have  had  in  your  business 
some  personal  relations  with  various  industrial  combina- 
tions, I  understand.  Will  you  be  kind  enough  to  mention 
some  of  those  with  which  you  have  been  connected  as 
organizer? — A.  I  have  organized,  or  been  one  of  the 
organizers,  of  the  National  Starch  Company,  the  Ameri- 
can Caramel  Company,  the  Sloss-Sheffield  Company, 
and  the  United  States  Rubber  Company.  [A  later  list 
would  include  the  United  States  Bobbin  and  Shuttle 
Company,  the  Union  Selling  Company,  the  American 
Chicle  Company,  the  International  Time  Recording  Com- 
pany, the  Rubber  Goods  Manufacturing  Company,  the 
Fairmont  Coal  and  Clarkson  Fuel  Company,  the  Com- 
puting Scale  Company,  and  the  Pacific  Packing  and 
Navigation  Company.] 

207 


208  THE  TRUST:    ITS  BOOK 

Q.  Will  you  state  briefly  the  reasons  that  influenced 
the  different  concerns  that  were  previously  separate  to 
come  together  into  these  combinations  ?— A.  To  secure 
economies  through'  combination,  and  to  have  the  prop- 
erty in  a  form  where  it  would  have  a  current  market 
value. 

Q.  That  is,  in  stocks  and  bonds  instead  of  in  the  plants 
themselves? — A.  In  realizable  securities.  By  joining 
the  combination  the  individual  manufacturers  recognized 
that  in  the  event  of  death  or  disability,  their  successors, 
instead  of  having  to  compete  with  the  best  intelligence 
in  the  industry,  would  have  that  intelligence  allied  with 
them  to  protect  all  their  interests.  Then  the  induce- 
ment on  the  part  of  many  people  has  been  that,  owing 
ttJ  the  war  of  prices  which  has  existed  (sUch'wars  being 
the  death  instead  of  the  life  of  trade) ,  they  have  felt 
forced  to  enter  into  combinations  in  order  to  avoid  failure 
or  serious  depreciation  of  their  interest. 

Q.  So  far  as  the  danger  that  comes  from  the  death 
of  members  of  those  separate  industries  is  concerned,  is 
there  not  a  difference  between  a  great  combination  con- 
trolling a  large  share  of  the  output  and  a  partnership  ? — 
A.  Provided  there  exists  a  union  of  interest  of  the  ablest 
men  in  the  industry,  the  efficiency  and  ability  of  the 
management  is  not  materially  reduced  in  the  event  of 
death.  An  individual  corporation,  however,  no  matter 
how  well  organized  or  how  well  established,  in  the  event 
of  the  death  of  its  head  fails  for  want  of  ability  of  the  first 
order  in  its  management.  The  best  example  of  that  which 
I  have  in  mind  at  the  moment  is  the  way  the  business  of 
A.  T.  Stewart  went  to  pieces  after  his  death.  If  that  had 
been  a  part  of  a  combination  and  Mr.  Wanamaker  had 
been  in  the  combination,  it  is  reasonable  to  assume  that 
the  business  never  would  have  declined. 

Q.  You  spoke  of  various  economies  that  it  was  ex- 
pected might  be  made.  Will  you  take  that  up  a  little 
more  in  detail?  —  A.  In  general,  centralized  manu- 
facture permits  the  largest  use  of  special  machinery.  In 


APPENDIX  209 

the  different  combinations  the  manufacturing  has  been 
centralized  and  economies  secured  through  the  adoption 
of  more  economical  methods  which  are  made  possible  by 
.the  centralization  of  a  large  volume  of  business.  Then, 
by  running  a  factory  full  time,  which  can  be  brought 
about  through  centralized  manufacture,  there  is  a  sub- 
stantial reduction  in  the  percentage  of  overhead  charges. 
In  recent  calculations  we  have  found  that  the  percentage 
saved  in  the  cost  of  production  by  running  a  factory  full 
time  instead  of  half  time  is  from  4  to  8  per  cent.  In 
certain  industries  there  have  been  substantial  economies 
through  direct  sales — direct  distribution — although  in 
securing  economies  in  that  department  of  the  business 
very  great  care  has  to  be  taken  not  to  decrease  the  effi- 
ciency of  the  organization.  One  of  the  dangers  that 
industrial  organizations  are  subject  to  is  that  the  manage- 
ment, desirous  of  securing  economies,  are  liable  to  go  too 
far  in  securing  economies  in  the  sale  of  their  products.  In 
doing  so  they  are  very  likely  to  reduce  very  seriously  the 
efficiency  of  that  branch  of  the  industry.  Substantial 
economies  can  be  made  in  that  way,  but  great  care  must 
be  taken  in  effecting  them. 

Q.  Does  it  make  any  difference  as  to  the  kind  of  goods 
that  you  have  to  dispose  of  whether  you  can  make  econ- 
omies in  this  way  by  selling  direct  or  through  agents? — 
A.  A  very  decided  difference. 

Q.  Can  you  illustrate  that  ? — A.  The  American  Chicle 
Company  is  enabled  to  distribute  a  large  amount  of 
goods  owing  to  the  fact  that  it  has  trade-marks  that 
are  very  highly  regarded  by  the  public.  In  the  case 
of  the  American  Chicle  Company  the  most  complete 
centralization  has  come  about.  The  whole  business  has 
been  centred  in  one  office,  but  they  have  30,000,000  cus- 
tomers that  insist  on  having  their  particular  brands. 

Q.  In  the  case  of  the  American  Chicle  Company,  then, 
your  idea  is  that  they  may  make  these  economies  in  sell- 
ing by  lessening  the  number  of  travelling  men  or  by 
lessening  the  amount  of  advertising? — A.  Yes;  by  re- 


210  THE  TRUST:    ITS  BOOK 

ducing  the  amount  of  advertising,  although  great  care 
must  be  taken  not  to  go  too  far  in  that  direction. 

Q.  They  can  make  the  advertising  more  efficient? — A. 
Since  combination  has  been  brought  about  they  can 
secure  the  same  results  at  considerable  less  expense, 
owing  to  the  more  intelligent  distribution  and  method 
of  advertising;  and  advertising  in  a  very  large  way  en- 
ables them  to  secure  more  favourable  rates. 

Q.  In  the  case  of  these  companies  that  you  have  been 
speaking  of,  has  there  been  any  material  saving  by  re- 
ducing the  number  of  travelling  salesmen  ? — A.  Yes. 

Q.  Is  there  any  other  saving  that  had  been  expected 
from  the  combination  ? — A.  By  centralization  there 
has  been  a  reduction  in  the  carrying  of  stocks,  thereby 
reducing  interest,  insurance,  storage,  and  shop  work. 

Q.  How  is  it  you  are  able  to  reduce  the  stocks  you  carry  ? 
Is  it  because  you  can  gauge  the  markets  better  and  fit 
your  supply  better  to  the  demand? — A.  Yes;  production 
is  regulated.  That  is  one  of  the  great  advantages  of  in- 
dustrial combinations.  Where  there  are  a  large  number 
of  concerns  that  are  competing  without  any  general  un- 
derstanding or  plan,  there  is  a  tendency  to  overproduc- 
tion, with  the  result  that  markets  become  demoralized. 
Overproduction  is  a  breeder  of  panics,  and  failures  result. 
When  these  interests  are  combined,  production  is  regulated 
to  the  requirements  of  the  country  to  a  large  extent. 

Q.  Can  you  think  of  any  other  sources  of  saving  that 
operate  ? — A.  The  advantage  that  results  from  standard- 
izing production  by  reducing  the  number  of  styles.  That 
causes  a  substantial  reduction  in  the  cost  of  manufacture, 
and  helps  to  reduce  stocks.  Then,  too,  the  company 
has  the  advantage  of  the  highest  intelligence  in  the  in- 
dustry in  adopting  the  best  standards. 

Q.  Can  you  mention  whether  you  expected  to  save 
anything,  or  have  saved  anything,  in  the  way  of  freight 
charges? — A.  Yes;  a  well-managed  combination  takes 
advantage  of  the  cheapest  transportation  facilities. 
They  will  ship  goods  to  the  West,  for  instance,  when  they 


APPENDIX  211 

can  get  the  advantage  of  water  freights  on  the  lakes. 
They  have  storage  facilities  at  western  points,  and  the 
rate  of  freight  is  considerably  less  during  the  summer 
than  when  water  transportation  is  closed;  the  well- 
managed  industrials  take  advantage  of  these  conditions. 

Q.  (By  Mr.  FARQUHAR.)  Are  there  not  some  economies 
in  the  purchase  of  raw  materials  ?  You  have  said  noth- 
ing at  all  about  where  you  get  your  raw  materials;  whether 
under  combination  you  can  secure  them  cheaper,  or 
make  arbitrary  rates  from  the  parties  you  buy  them 
from. — A.  As  a  rule  there  is  not  much  saving  to  be  se- 
cured in  the  purchase  of  staple  merchandise.  In  some 
instances  the  large  consolidations  are  at  a  disadvantage, 
owing  to  the  fact  that  they  are  such  large  buyers.  In 
general,  I  should  say  that  some  economies  can  be  secured 
by  them,  but  these  would  not  be  important  unless  the 
combination  should  use  a  very  large  percentage  of  the 
raw- material  produced.  In  considering  the  raw  material 
market,  it  is  necessary  to  include  in  your  calculations  all 
the  raw  material  in  the  world,  owing  to  the  present  facili- 
ties for  quick  transportation.  Raw  material  in  London 
is  as  available  as  if  it  were  around  the  corner;  therefore, 
unless  an  industry  uses  a  large  percentage  of  the  raw 
material  that  is  produced  in  the  world  at  large,  no  im- 
portant advantage  can  be  obtained. 

Q.  Can  you  mention  any  other  savings  that  you  had 
anticipated  in  the  formation  of  these  companies? — A. 
When  men  come  together  who  have  heretofore  been  in 
competition,  they  bring  to  the  common  interest  a  very 
complete  knowledge  of  the  credit  conditions;  and  a  com- 
bination must  guard  itself  against  bad  debts. 

Q.  Do  you  think  of  other  economies  ? — A.  The  general 
advantages  that  result  from  comparative  accounting. 

Q.  You  know  that  Mr.  Havemeyer  said  that  the  pro- 
tective tariff  was  the  mother  of  all  trusts.  I  would  like 
to  ask  you  if  that  is  true  in  regard  to  the  combination  of 
the  rubber  industry,  whether  the  tariff  has  enabled  you 
in  any  way  to  make  a  combination  ? — A.  No;  the  relation 


212  THE  TRUST:    ITS  BOOK 

of  the  tariff  to  the  rubber  industry  has  received  practically 
no  consideration  on  the  part  of  rubber  manufacturers, 
except  in  the  case  of  rubber  clothing,  which  would  amount 
to,  say,  less  than  one-half  of  i  per  cent,  of  the  total  in- 
dustry. Very  few  rubber  manufacturers  could  tell  you 
what  the  percentage  of  the  duty  is.  They  have  not 
given  it  any  consideration. 

Q.  (By  Mr.  LITCHMAN.)  Is  it  not  true  that  the  manu- 
facture of  mackintoshes  is  protected  in  this  country  by  the 
tariff? — A.  Yes;  but  there  are  people  who  insist  on  wear- 
ing English  clothes,  and  they  are  supplied  by  the  mackin- 
toshes of  London. 

Q.  Then,  as  the  promoter  of  this  combination,  you  are 
not  able  to  say  whether  the  tariff  is  any  benefit  to  the 
rubber  industry  or  not  ? — A.  I  could  not  say.  J  assume 
that  if  the  tariff  was  entirely  removed  it  might  be  that 
some  parties  would  take  advantage  of  the  lower  rates  of 
wages  in  Europe.  In  fact,  Americans  would  be  very  likely 
to  establish  factories  abroad,  utilizing  the  cheap  labour, 
and  then  bring  the  products  into  this  country.  The  most 
important  rubber  factory  in  Great  Britain,  for  instance, 
was  established  by  an  American.  He  took  the  machinery 
over  there  and  established  the  business  in  Edinburgh. 
In  the  event  of  the  tariff's  being  taken  off,  I  should  say 
that  the  rubber  manufacturers  would  take  advantage  of 
the  low-priced  labour  and  take  American  methods  to 
Europe  and  so  would  be  able  to  produce  rubber  goods 
cheaper  than  they  could  be  produced  in  the  United 
States. 

Q.  Are  you  familiar  enough  with  labour  in  this  country 
and  in  Europe  to  say  anything  with  regard  to  the  relative 
efficiency  of  labour  here  and  there  ? — A.  In  general,  I 
believe  that  American  labour  is  more  efficient  than  Euro- 
pean labour,  especially  where  the  American  workman  is 
bossing  the  machine:  where  he  occupies  the  position  of 
an  overseer.  The  machinery  is  doing  the  work  that  pauper 
labour  is  doing  on  the  other  side.  But  in  the  manufac- 
ture of  rubber  boots  and  shoes,  and  in  industries  where 


APPENDIX  213 

the  greater  part  of  the  work  can  not  be  done  by  machinery, 
but  is  done  almost  entirely  by  hand,  I  am  satisfied  that 
you  can  get  more  labour  for  your  money  in  Europe  than 
you  can  in  the  United  States.  If  you  will  examine  our 
exports,  you  will  find  that  a  large  percentage  of  our  ex- 
ports of  manufactured  goods  are  the  products  of  machinery 
where  the  American  workman  is  an  overseer  of  machinery 
instead  of  a  hand  labourer.  On  the  other  hand ,  you  will  find 
that  the  neutral  markets  are  supplied  by  the  cheap-labour 
countries  with  articles  in  the  production  of  which  hand 
labour  predominates. 

Q.  You  spoke  sometime  ago  about  the  advantages  or 
savings  that  came  from  concentration  of  management, 
and  then  later,  in  another  connection,  of  the  advantages 
that  came  from  stimulating  individuality  in  the  manage- 
ment of  plants.  I  .wish  you  would  develop  that  thought 
a  little  further,  if  you  will,  and  speak  of  the  kinds  of 
industry  that  are  particularly  adapted  for  the  concentra- 
tion of  management,  and  of  the  others  where  the  retain- 
ing of  the  individuality  in  management  is  more  desirable. 
— A.  In  general  I  think  that  a  centralized  management 
is  the  most  desirable  if  there  are  men  of  sufficient  intel- 
lectual ability  to  administer  an  extended  business;  but 
it  is  difficult  to  find  a  man  of  sufficient  ability  to  run  one 
large  business,  and  there  are  few  intellectual  giants  that 
have  the  ability  to  run  ten  or  more  large  businesses. 
In  my  judgment  one  of  the  dangers  to  the  success  of 
industrials  is  that  parties,  without  being  intellectual 
giants, .  are  liable  to  attempt  to  centralize  too  much. 
Taking  men  as  they  are,  I  think  that  in  businesses  where 
high-class  ability  is  required  at  many  places,  where 
the  business  is  not  of  such  a  character  that  its  conduct 
can  be  reduced  to  rules,  where  its  success  depends  on  local 
ability  and  local  judgment,  and  where  the  efficiency  of 
the  selling  department  is  involved  with  long-time  personal 
relations,  it  may  be  very  dangerous  to  suddenly  centralize 
such  a  business.  It  is  far  wiser,  I  think,  in  a  case  of  that 
kind,  to  sustain  the  independence  and  individuality  of 


214  THE  TRUST:    ITS  BOOK 

the  separate  concerns.  In  that  way  you  have  the  ad- 
vantage of  the  organizations  that  have  created  those  con- 
cerns, and  by  an  adjustment  of  compensation,  based 
somewhat  upon  the  earnings  of  those  individual  con- 
cerns, you  sustain  the  individual  interest  that  is  essential  to 
success.  At  the  same  time  your  central  organization 
has  the  advantages  of  comparative  accounting  and  com- 
parative administration,  and  is  able  to  hold  the  separate 
concerns  to  a  strict  accountability,  or,  by  appealing  to 
their  pride,  to  promote  a  healthy  spirit  of  rivalry.  In 
many  cases  it  is  my  judgment  that  this  idea  of  centraliza- 
tion can  be  carried  too  far,  and  that  it  is  often  much 
better  to  have  these  concerns  run  independently.  Now, 
it  may  be  said  that  you  do  not  get  the  full  benefits  of 
centralization.  That  is  very  true.  But,  on  the  other 
hand,  I  believe  you  get  a  more  efficient  management 
than  you  would  by  centralization.  Under  that  plan, 
through  a  system  of  comparative  accounting,  you  are 
enabled  to  measure  the  different  managements,  and 
you  can  go  a  long  way  toward  bringing  the  standard  of 
all  up  to  the  standard  of  the  best. 

Q.  You  spoke  of  comparative  accounting  as  one 
method,  and  of  arranging  the  pay  of  the  superintendents 
in  part  by  commissions  on  the  profits  of  the  business  as 
another  method.  Are  you  inclined  to  think  that  those 
two  methods  may  practically  take  the  place  of  the  regular 
competitive  system,  in  the  way  of  holding  up  the  standard 
of  excellence  in  work,  and  holding  up  also  the  interest  of 
the  superintendents? — A.  I  have  not  any  doubt  but 
that  we  can  thus  hold  up  the  standard  of  quality.  In 
most  cases  I  think  that  the  pride  which  a  man,  knowing 
that  his  work  is  being  compared  with  others',  has  in 
handling  his  business  successfully,  together  with  the 
incentive  given  him  by  an  interest  in  the  profits  of  the 
business  he  is  managing,  keeps  up  the  individual  interest 
that  exists  where  the  person  possesses  a  large  ownership. 
But  in  many  cases  it  does  not.  One  of  the  fundamental 
difficulties  of  the  management  of  these  corporations  lies 


APPENDIX  215 

in  the  fact  that  the  managers  have  a  smaller  percentage 
of  interest  in  the  operations  that  they  are  conducting 
under  the  plan  of  an  industrial  combination  than  they 
had  when  it  was  an  individual  property,  or  when  they 
had  a  large  interest  in  a  small  corporation.  That  is 
fundamental.  There  is  no  way  in  which  that  condition 
can  be  changed.  My  experience  has  been  that  the  best 
way  to  meet  that  condition  is  through  an  accurate  system 
of  comparative  accounting,  and  in  that  accounting  it  is 
advisable  not  only  to  compare  general  results,  but  to 
compare  details  so  as  to  find  the  cost  of  different  parts 
of  the  process.  At  the  same  time  it  is  advisable  to  have 
the  managers  interested  in  the  profits  of  the  business. 
That  comes  as  near  as  possible  to  solving  the  difficulty. 
On  the  other  hand,  there  are  lines  of  business  of  such  a 
character  that  they  can  be  all  handled  from  a  central 
office.  Such  a  business  can  be  reduced  to  a  very  accurate 
system.  For  example,  the  manufacture  of  metals  can 
probably  be  reduced  to  a  more  accurate  system  than  the 
manufacture  of  rubber  goods,  since  in  the  former  there  is 
no  way  in  which  you  can  utilize  the  chemist  to  any  ex- 
tent. You  can  not  lay  down  any  positive  rules  as  to 
chemical  combinations,  because  those  materials  are  con- 
stantly fluctuating,  and  there  is  such  a  great  variety  of 
conditions  to  meet  that  the  business  of  manufacturing 
rubber  goods  must  largely  depend  on  local  intelligence, 
and  that  necessitates  high-class  ability  in  the  local  man- 
agement. And  such  high-class  ability  is  well  paid. 
Sometimes  the  salaries  of  the  chief  executive  officers  are 
very  small  as  compared  with  the  earnings  of  local  mana- 
gers. I  know  of  cases  where  the  payments  to  local  mana- 
gers are  three  times  what  is  paid  to  the  chief  officers  of 
the  corporation. 

Q.  That  does  not  hold  where  the  industry  is  more 
concentrated,  of  course? — A.  In  case  of  concentration 
the  big  salaries  are  at  the  top. 

Q.  That  brings  up  another  question  in  connection 
with  the  relations  of  the  combinations  to  the  labour 


ai6  THE  TRUST:    ITS  BOOK 

interests.  We  have  already  spoken  of  the  relations  of 
travelling  salesmen;  how  about  superintendents  in  your 
factories?  When  you  make  a  combination  are  you 
generally  able  to  save  any  considerable  part  of  the  cost 
of  superintendence  ? — A.  Only  by  centralized  manufac- 
ture. There  is  some  saving  in  superintendence,  but  that 
is  not  a  large  item. 

Q.  The  more  the  industry  is  concentrated  the  larger 
that  item  would  become? — A.  Yes. 

Q.  What  is  the  attitude  of  combinations  towards  trade 
unions  ? — A.  We  have  never  had  a  strike  in  any  industry 
that  I  have  been  connected  with,  and  that  is  the  best 
evidence  that  we  get  on  very  well  with  our  labouring  men. 

Q.  I  wish  you  would  consider  a  little  further  this  ques- 
tion of  the  tariff.  You  spoke  of  it  in  considerable  detail 
in  reference  to  rubber  manufacturing.  How  do  you 
consider  the  tariff  as  related,  for  example,  to  the  manu- 
facture of  starch  ? — A.  Inasmuch  as  we  are  the  cheapest 
producers  of  corn,  and  the  manufacture  of  starch  is  con- 
ducted principally  by  machinery  and  not  by  hand  labour, 
I  think  that  the  question  of  the  tariff  is  of  very  little  im- 
portance as  relating  to  that  industry. 

Q.  As  regards  practically  all  the  industries  you  have 
mentioned — the  rubber,  chicle,  and  starch — the  tariff, 
then,  has  practically  very  little  to  do  with  them? — A. 
That  is  true.  But  in  the  case  of  rubber  and  rubber  goods, 
and  particularly  the  manufacture  of  boots  and  shoes, 
inasmuch  as  the  great  percentage  of  the  labour  is  hand 
labour,  the  removal  of  the  duty  might  force  the  company 
to  manufacture  its  goods  in  Europe  in  order  to  avail 
itself  of  the  cheaper  labour  of  Europe.  But  in  the  case 
of  the  manufacture  of  starch,  I  think  we  get  cheaper 
labour  than  we  would  get  in  Europe,  because  it  is  a  ques- 
tion of  the  labourer  occupying  the  position  of  overseer 
over  machinery;  and  the  American  overseer  being,  in 
my  judgment,  a  man  of  greater  efficiency  and  higher 
intelligence  than  the  European  labourer,  I  think  we  get 
more  for  our  money  than  they  get  in  Europe. 


APPENDIX  217 

Q.  The  statement  is  frequently  made  that  these  larger 
combinations  are  able  to  put  the  prices  of  their  goods 
unduly  high  on  account  of  the  protective  influence  of 
the  tariff;  and  the  suggestion  is  even  made  that  the  tariff 
should  be  removed  in  order  to  prevent  the  abuses  of 
trusts  along  that  line.  What  is  your  opinion  on  that 
question? — A.  In  general,  I  think  that  every  year  our  ex- 
port trade  is  going  to  become  of  greater  importance,  and 
I  think  we  should  tend  to  freer  trade.  The  only  danger 
that  exists  at  present  in  international  trade  is  the  danger 
of  a  war  of  tariffs;  and  in  revising  duties  the  fact  that 
these  large  consolidations  are  in  a  position  to  gain  ad- 
vantages in  manufacture  through  centralization  should 
be  taken  into  consideration.  But  any  legislation  that 
would  discriminate  against  trusts  in  general  would  be 
most  disastrous  to  labour  interests  and  would  create  an 
industrial  panic. 

Q.  You  think  combinations  have  been  useful  and  effi- 
cient in  the  way  of  stimulating  export  trade  ? — A.  I  have 
no  doubt  of  it;  and  the  best  evidence  is  the  fact  that  the 
great  bulk  of  our  exports  of  manufactured  goods  is  pro- 
duced by  great  combinations. 

Q.  Do  you  think  there  is  danger,  on  account  of  the  tariff, 
of  their  keeping  prices  high  enough  here  so  as  to  make 
their  profits  secure,  and  then  holding  the  foreign  market 
by  too  low  a  reduction  of  prices  to  foreigners — selling 
abroad  steadily  considerably  cheaper  than  they  do  here  ? 
— A.  That  condition  does  not  prevail.  There  are  times 
when  there  is  a  surplus,  when  manufacturers  will  seek 
a  foreign  market  at  a  concession.  That  is  true  in  all 
manufacturing  countries.  It  does  not  apply  especially 
in  the  United  States,  but  it  is  true  in  all  countries.  It  is 
true  in  England,  where  there  is  free  trade. 

Q.  Is  there  any  difference  in  that  particular  between 
trust-made  goods  and  those  made  independent  of  trusts  ? 
— A.  No  difference.  On  the  contrary,  there  was  far  more 
of  a  disposition  to  make  concessions  before  these  combi- 
nations, from  the  fact  that  individual  manufacturers 


218  THE  TRUST:    ITS  BOOK 

were  more  under  the  necessity  to  realize  quickly.  The 
great  industrial  combinations,  by  the  great  advantage 
they  have  in  regulating  production,  avoid  excessive  pro- 
duction, and  therefore  are  less  likely  to  be  under  financial 
pressure. 

Q.  (By  Mr.  FARQUHAR.)  When  you  speak  of  a  change 
in  the  tariff — any  modification  at  all — do  you  think  an 
advantage,  however  large  theoretically,  would  practically 
justify  the  cutting  of  the  tariff  in  two  on  any  article  ?  Do 
you  think  it  subserves  the  whole  interests  of  the  country 
to  tinker  with  the  tariff  in  that  way  ? — A.  I  think  tinker- 
ing with  the  tariff  has  always  been  decidedly  prejudicial 
to  business  interests.  It  creates  unrest  and  uncertainty. 
Still,  if  there  is  to  be  a  change,  we  should  tend  to  freer 
trade.  Considering  the  fact  that  we  have  a  balance  of 
trade  in  our  favour  of  $650,000,000,  in  dealing  with  the 
world  at  large  we  can  lower  the  wall  of  protection  rather 
than  put  any  more  bricks  on  top  of  it. 

Q.  How  far  would  you  lower  the  wall  in  the  admission 
of  foreign  goods  in  competition  with  American  work- 
men ? — A.  I  believe  as  a  matter  of  national  interest  that 
wages  should  be  sustained,  but  that  in  regulating  the 
tariff  there  is  no  general  rule  that  will  apply.  Many  mat- 
ters must  be  taken  into  consideration.  I  do  know,  how- 
ever, that  any  legislation  to  reduce  the  tariff  on  goods 
made  by  combinations  would  be  most  unwise;  and  I  can 
not  imagine  any  action  that  would  be  more  prejudicial 
to  the  labour  interests  of  the  country  than  that,  because 
it  would  result  in  American  manufacturers  going  to  the 
cheapest  labour  markets  in  the  case  of  goods  in  which 
hand  labour  is  an  important  item  of  cost. 

Q.  (By  Mr.  CLARKE.)  What  effect  would  it  have  on 
the  competing  industries  here — those  that  are  outside 
of  the  combinations? — A.  It  would  prejudice  them  to  a 
greater  extent  than  it  would  the  combinations,  from  the 
fact  that  the  former  would  have  less  financial  ability  to 
deal  with  a  problem  of  that  character.  The  corporations 
or  combinations  have  surplus  financial  strength  to  deal 


APPENDIX  219 

with  abnormal  conditions,  while  the  individual  manu- 
facturer is,  as  a  rule,  using  his  facilities  up  to  their  full 
extent. 

Q.  Do  you  think  that,  under  any  conditions,  an  in- 
crease of  the  export  trade  by  reason  of  a  modification  of 
the  American  tariff  which  might  discriminate  against 
American  wages  would  be  an  advantage?  That  is, 
should  we  not  rather  seek  a  foreign  market  than  main- 
tain and  hold  a  home  market  ? — A.  It  is  very  important 
that  we  should  have  a  widely  distributed  market.  With 
a  widely  distributed  market  we  are  less  subject  to  the 
effects  of  periods  of  contraction  and  expansion.  I  have 
noticed  during  periods  of  contraction  that  the  manufac- 
turers who  have  had  foreign  markets  have  run  their  fac- 
tories and  continued  to  have  a  satisfactory  business,  while 
the  manufacturers  who  were  dependent  solely  on  the 
home  market  were  under  a  very  serious  disadvantage. 
Consequently  I  think  it  is  very  desirable  that  we  should 
do  everything  possible  to  extend  our  markets  abroad, 
But  there  is  no  reason  why  we  can  not  hold  our  home 
markets  while  extending  our  markets  abroad.  I  do  not 
see  any  substantial  conflict  .of  interest  there. 

Q.  (By  Mr.  KENNEDY.)  If  there  should  come  world- 
wide combination  in  any  industry — and  it  has  been  more 
than  hinted  at  in  some  cases — where  would  the  manu- 
facturing be  done?  In  the  country  where  the  labour  is 
cheapest?  Take  the  rubber  industry  for  example. — A. 
No;  that  is,  if  other  conditions  remain  the  same,  the 
manufacturing  would  be  done  in  the  countries  where  the 
merchandise  could  be  produced  to  the  best  advantage 
with  relation  to  the  market  for  it.  For  instance,  you 
have  an  example  of  what  might  almost  be  spoken  of  as  a 
world  combination  in  the  Singer  Sewing  Machine  Com- 
pany. They  have,  I  understand,  about  50,000  employes. 
They  are  manufacturing  in  different  parts  of  Europe  and 
in  the  United  States.  They  are  manufacturing  in  the 
United  States  for  the  United  States  market.  The  con- 
ditions that  prevail  in  that  case  would  prevail  generally 
because  that  is  a  case  quite  in  point. 


220  THE  TRUST:    ITS  BOOK 

Q.  If  there  were  a  world- wide  combination  in  any  in- 
dustry, the  owners  would  not  care  whether  there  was  a 
protective  tariff  in  any  country,  would  they? — A.  No; 
but  these  combinations  are  limited  by  the  impossibility 
of  finding  men  of  sufficient  capacity  to  handle  such  an 
extended  business.  If  one  concern  owned  all  the  factor- 
ies in  its  branch  of  manufacture  in  the  world,  it  would  be 
immaterial  as  to  whether  there  was  a  tariff  or  not  so  far 
as  that  industry  was  concerned,  but  it  would  be  material 
to  the  labour  interests  of  the  country. 

Q.  How  far  is  monopoly  maintained  by  crushing  com- 
petition in  its  incipient  state? — A,  The  only  way  that 
competition  can  be  affected  is  by  creating  and  maintain- 
ing facilities  for  the  lowest  cost  of  production.  Industrial 
combinations,  unless  they  are  favoured  by  public  fran- 
chises or  by  government  patents,  are  subject  to  the  law 
that  "trade  follows  the  price,  and  the  lowest  price  makes 
the  market. " 

Q.  Does  not  a  strong  combination,  already  having 
control  of  the  market  and  foreseeing  competition  from  a 
new  industry,  have  power  to  crush  that  new  industry  by 
underbidding  it,  even  at  a  loss  to  itself,  and  thereby 
prevent  that  incipient  corporation  from  developing  into 
a  rival? — A.  The  great  combination  is  subject  to  very 
great  disadvantages  in  a  case  of  that  kind.  Inasmuch 
as  the  output  of  a  great  combination  is  so  very  large,  a 
reduction  of  price  of  small  account  to  the  individual  con- 
cern is  of  enormous  account  to  the  combination.  There- 
fore the  condition  must  be  very  exceptional  where  a  great 
combination  would  reduce  prices,  because  the  loss  would 
be  very  heavy  and  very  great.  But  if  the  great  combina- 
tion creates  facilities  for  economic  production,  then  they 
can  hold  a  market  by  making  a  lower  price  to  the  con- 
sumer, and  in  my  judgment  when  they  have  held  a  market 
in  that  way  it  results  in  the  greatest  good  to  the  greatest 
number. 

Q.  What  is  the  effect  on  wages? — A.  The  effect  on 
wages  is,  in  my  judgment,  that  they  are  to  a  very  large 


APPENDIX  221 

extent  sustained  owing  to  the  advantage  which  we  get  in 
producing  goods  by  the  centralization  of  manufacture. 
In  making  a  market  we  figure  up  the  cost.  We  say, 
European  wages  are  40  per  cent,  less  than  ours.  As 
against  that  we  get  an  advance  through  combination, 
through  economic  methods,  through  the  use  of  special 
machinery  made  possible  by  centralized  manufacture. 
The  effect  of  these  combinations  is  to  give  us  an  advan- 
tage that  enables  us  to  sustain  wages  in  this  country. 

Q.  What  is  the  effect  on  the  possibility  of  employment 
for  the  individual  workmen? — A.  At  times  these  com- 
binations, in  order  to  produce  under  the  most  economic 
conditions,  throw  workmen  out  of  employment;  but  in 
the  United  States  there  is  sufficient  employment  during 
periods  of  prosperity  (such  as  we  are  having  now,  when 
these  great  industrial  combinations  are  working  under 
the  most  advantageous  conditions)  to  enable  a  workman 
to  find  employment  in  other  lines,  and  the  general  effect 
is  that  the  workman  gets  more  money  for  his  work,  and 
he  gets  more  produce  for  his  money. 

Q.  Do  you  think  it  is  easy  for  a  man  who  has  worked  a 
good  share  of  his  life  in  any  one  industry  to  adapt  himself 
to  any  other  line  of  employment  ? — A.  No ;  but  I  think 
that  in  general,  in  looking  at  the  question  from  the  point 
of  view  of  the  greatest  good  for  the  greatest  number,  there 
is  a  general  advantage  in  the  conditions  that  bring  about 
a  low  cost  of  production.  I  think  that  is  evidenced  by 
the  fact  that  in  the  history  of  the  world  there  has  never 
been  a  time  when  the  wage  earner  was  living  as  well  as  he 
is  in  the  United  States  to-day. 

Q.  Do  you  think  that  is  due  to  the  combination  of 
industrial  enterprises  or  to  combination  among  the  work- 
men themselves? — A.  I  think  it  is  largely  due  to  the 
prosperity  existing  in  the  country,  which  has  to  a  great 
extent  been  brought  about  by  these  industrial  combina- 
tions; but  I  also  recognize  the  right  of  the  wage  earner  to 
look  after  his  interests. 

Q.  That  leads  up  to  the  point  I  wanted  to  bring  out, 


222  THE  TRUST:    ITS  BOOK 

as  to  how  far  is  there  growing  a  community  of  interest 
between  the  employer  and  the  employe  in  these  large 
industries  ? — A.  I  think  there  is  a  growing  feeling  on  the 
part  of  the  workmen  that  they  are  being  benefited  by 
the  conditions  which  are  making  this  a  period  of  pros- 
perity. 

Q.  Do  you  think  there  is  a  sentiment  among  the  mana- 
gers of  these  corperations  that  it  is  wise  to  cultivate  a 
friendly  feeling  with  the  workmen  employed  ? — A.  I  think 
so;  and  it  is  with  great  satisfaction  that  I  am  able  to  state 
that  no  industry  with  which  I  am  connected,  or  ever  have 
been  connected,  has  had  a  strike. 

Q.  You  have  spoken  several  times  as  to  the  benefits 
that  come  from  these  combinations.  I  wish  you  would 
call  our  attention  to  the  evils  of  these  combinations  as 
they  appear  to  you  from  your  experience.  You  have 
already  mentioned  one  danger  in  the  lessening  of  a  per- 
sonal interest  on  the  part  of  the  superintendents  and  man- 
ufacturers. Perhaps  you  can  think  of  some  other  ? — A. 
Well,  there  is  always  the  disadvantage  that  would  result 
from  the  improper  direction  of  a  great  combination — 
like  a  modern  steamboat  as  compared  with  a  canoe  in 
case  of  misdirection.  The  responsibilities  become  very 
serious  and,  in  general,  unless  substantial  economies  in 
production  can  be  secured  through  combination,  I  think 
it  is  far  better  for  the  parties  to  run  their  business  inde- 
pendently, because  there  is  certainly  a  disadvantage  in 
individuals  turning  over  the  management  of  their  property 
to  boards  of  directors.  There  comes  a  question  of  weigh- 
ing advantages  and  disadvantages;  but  it  would  appear 
from  the  many  eombinations  that  have  been  formed, 
and  are  still  being  formed,  that  those  best  able  to  judge 
have  regarded  the  advantages  as  outweighing  the  dis- 
advantages. 

Q.  Are  you  inclined  to  think  that  there  are  a  good 
many  lines  of  industry  where  combination  would  not  be 
advisable  ? — A.  I  think  there  are.  In  many  cases  I  have 
refused  to  take  part  in  assisting  to  bring  about  consolida- 


APPENDIX  223 

tions  because  I  did  not  feel  that  there  were  any  substantial 
economies  to  be  secured.  That  is  always  the  way  I 
measure  a  proposition  when  it  comes  before  me.  At  the 
very  outset  I  study  the  question  as  to  whether  there  are 
any  important  advantages  to  be  secured  by  combination — 
advantages  in  reduced  cost  of  production  and  distribu- 
tion— if  not,  I  advise  parties  against  entering  into  a  com- 
bination or  attempting  it. 

Q.  (By  Mr.  CLARKE.)  Mr.  Carnegie  wrote  the  com- 
mission that  in  his  opinion  the  only  danger  from  trusts 
is  to  the  people  who  are  in  them.  Does  that  suggest  to 
you  some  possible  danger  that  you  have  not  mentioned  ? — 
A.  It  is  evident  that  while  there  is  a  centralization  of 
manufacture  going  on  there  is  a  decentralization  of 
ownership ;  that  there  are  a  hundred  times  as  many  people 
interested  in  our  industrials  now  as  there  were  twenty-five 
years  ago,  and  there  probably  will  be  at  the  end  of  another 
ten  years  a  hundred  times  as  many  more.  So  these  in- 
terests are  being  more  widely  distributed.  That  is  true  of 
every  industrial  in  which  I  am  interested;  and  conse- 
quently it  is  a  matter  of  very  serious  import  to  the  in- 
vestors that  these  concerns  should  be  managed  in  the 
interest  of  the  stockholders.  There  is  this  fact,  however, 
in  thinking  of  one  of  the  advantages  I  have  not  already 
mentioned:  These  combinations  are  giving  the  public  op- 
portunities for  profit  that  they  would  not  otherwise  possess. 
I  had  a  calculation  made  showing  the  average  earnings 
of  37  railroads  to  be  43-4  per  cent,  on  the  market  price, 
and  a  little  more  than  that  on  the  par  value  of  the  securi- 
ties. If  it  had  not  been  for  the  creation  of  these  industrial 
securities  I  am  satisfied  that  the  percentage  would  have 
been  considerably  less.  But  in  figuring  the  earnings  of 
47  important  industrials,  and  not  including  the  Standard 
Oil  Company,  which  has  been  an  unusual  success,  I 
find  that  the  average  earnings  on  the  capitalization  is 
over  7  per  cent.,  and  that  the  earnings  are  over  n  per 
cent,  on  the  present  market  price  of  the  industrials.  So 
the  profits  of  these  industrial  combinations  are  being 


224  THE  TRUST:    ITS  BOOK 

very  widely  distributed.  But,  on  the  other  hand,  these 
investors  are  to  a  considerable  extent  dependents  on  the 
management. 

Q.  (By  Mr.  JENKS.)  I  suppose,  speaking  generally,  a 
controlling  amount  of  the  stock  is  held  in  a  few  hands 
in  practically  all  combinations? — A.  Not  a  majority; 
but,  as  a  rule,  in  most  of  the  industrials  the  managers  are 
the  larger  stockholders. 

Q.  (By  Mr.  LITCHMAN.)  The  more  widely  extended 
the  ownership,  the  more  serious  and  far-reaching  the 
disaster  in  case  there  is  dishonest  or  inefficient  manage- 
ment?— A.  Yes.  But  we  have  arrived  at  a  point  now 
where  a  disaster  to  one  or  two  industrials  is  not  going  to 
seriously  affect  the  entire  industrial  situation.  The 
failure  of  Cordage  in  the  spring  of  1893  discredited  almost 
every  industrial  then  existing;  but  there  are  so  many 
industrials  now  that  have  been  organized  and  the  system 
is  so  well  understood,  that  a  disaster  to  any  one  or  two 
industrials  would  not  create  any  general  depression  in 
industrial  interests. 

Q.  I  have  seen  recently  that  those  who  are  champion- 
ing industrial  combinations  claim  that  one  of  the  results 
will  be  that  production  will  be  so  controlled  that  there 
will  be  no  overproduction  and  there  will  be  no  panics  in 
the  future.  Do  you  think  that  will  be  one  of  the  future 
results  of  these  industrial  combinations? — A.  I  think 
they  will  go  a  long  way  toward  preventing  panics. 

Q.  (By  Mr.  JENKS.)  Speaking  generally,  and  without 
reference  to  these  combinations  you  yourself  have  repre- 
sented, do  you  consider  that  there  has  been  any  particu- 
lar evil  to  the  country  from  overcapitalization  in  these 
industries? — A.  I  think  there  have  been  many  cases  of 
overcapitalization  that  have  been  very  prejudicial.  In 
many  it  has  had  a  salutary  effect.  It  has  made  investors 
less  careless.  I  think  that  many  of  them  will  be  more 
careful  in  making  investments.  The  best  evidence  that 
there  has  been  in  many  cases  decided  overcapitalization 
and  also  a  bad  management  is  the  present  market  prices 


APPENDIX  225 

of  certain  shares,  and  I  think  that  the  result  has  been 
that  the  investors  will  be  more  careful.  It  is  my  opinion 
that  the  banking  houses  who  have  endorsed  unsound 
capitalizations  have  been  discredited  to  such  an  extent 
that  they  cannot  repeat  the  operation.  Speaking  gen- 
erally as  regards  the  capitalization  of  these  industries,  it 
seems  to  me  that  care  should  be  taken  to  protect  the 
senior  securities,  which  are  regarded  as  investment  se- 
curities. The  common  stock,  although  its  amount  may 
appear  large,  is  well  known  as  a  rule  to  represent  good 
will.  The  word  "common"  is  engraved  in  big  letters 
across  the  face  of  it,  and  people  in  general  have  noticed 
that  that  is  not  as  a  rule  investment  security  at  this  time. 
I  have  no  question  but  that  in  time  many  of  these  in- 
dustrial securities — many  common  stocks  to-day  might 
be  classed  as  speculative  securities — will  become  invest- 
ment securities,  as  are  to-day  our  railroad  shares  that 
were  originally  issued  for  good  will.  In  general  I  have 
no  doubt  that  the  public  have  been  benefited  by  these 
capitalizations.  They  are,  in  my  judgment,  receiving 
double  the  income  that  they  would  get  if  these  industrial 
securities  had  not  been  created.  Formerly  the  great 
manufacturing  interests  were  in  a  few  hands,  and  to-day 
there  has  been  a  wide  distribution.  Of  course  when  you 
hear  of  some  of  the  profits  that  have  been  made  by  organ- 
izers and  promoters,  they  seem  large  in  amount.  But 
if  you  want  to  have  an  industrial  combination  created, 
it  will  not  be  an  easy  matter  to  find  a  man  of  sufficient 
ability  and  financial  responsibility  to  take  it  up.  There 
has  to  be  an  inducement  offered,  because  it  involves  a 
risk,  a  very  high  class  of  work;  and  I  think  that  men  who 
go  to  New  York  to-day  to  interest  people  in  forming 
industrial  combinations  do  not  find  it  an  easy  matter. 

Q.  Perhaps  you  can  take  a  moment  to  tell  us  whether 
you  think  any  legislation  in  relation  to  these  industrial 
combinations  would  be  desirable;  and  if  so,  of  what 
nature  it  should  be  ? — A.  My  idea  is  that  affairs  of  trade 
are  best  regulated  by  natural  laws.  It  is  very  difficult 


226  THE  TRUST:    ITS  BOOK 

to  suggest  legislation  of  any  radical  character  that  can 
supplant  to  advantage  the  natural  law  of  supply  and 
demand.  For  instance,  the  courts  in  Germany  have 
sustained  the  agreements  which  we  call  restraint  of  trade 
agreements.  The  result  of  this  has  been  that  there  have 
been  fewer  combinations  in  Germany.  In  this  country 
laws  have  been  passed  against  agreements  between  cor- 
porations for  the  purpose  of  regulating  trade.  Well, 
that  very  legislation  has  had  a  tendency  to  force  organiza- 
tion of  industrial  combinations.  The  legislators  who 
formulated  the  restraint  of  trade  laws  did  not  anticipate 
that  those  very  laws  would  be  one  of  the  strongest  reasons 
for  bringing  about  the  organization  of  industrial  combi- 
nations. The  idea  has  been  suggested  of  creating  con- 
ditions to  limit  the  compensation  of  those  who  organize 
industries;  but  if,  as  I  know  it  to  be  a  fact,  it  is  difficult 
to  get  bankers  of  strength  or  ability  to  take  up  that  class 
of  work  now,  while  there  is  no  restriction,  it  would  make 
it  still  more  difficult  if  there  were  restrictive  legislation. 
While  I  think  it  is  desirable  that  there  should  be  a  system 
sustained  for  proper  auditing  and  accounting,  and  regu- 
lation as  to  the  issuing  of  securities,  the  evils  which  have 
developed  in  connection  with  the  organization  of  in- 
dustries are  being  corrected  by  natural  laws.  The  care- 
less banker  has  lost  his  reputation;  the  careless  investor 
has  lost  his  money;  and  the  result  of  it  is  greater  caution 
all  around.  The  fact  is  that  we  have  been,  in  a  way, 
passing  through  a  period  of  education.  Every  day  the 
people  in  general  are  becoming  educated  as  to  these  or- 
ganizations. This  commission  is  doing  valuable  work 
in  that  direction.  As  combinations  are  better  under- 
stood they  will  be  organized  on  a  sounder  basis  and  will 
have  more  intelligent  management. 

(Testimony  closed.) 


III. 


ADAMS,  Charles  Francis.  The  place  of  corporate  action 
in  our  civilization. 

(In  Shaler,  N.  S.:  The  United  States  of  America,  vol.  2, 

pp.  191-213.     New  York,  1894) 
"Considers  Trusts;'  the  'Standard  Oil  Company,*  etc." 

ADAMS,  Edward  F.     The  modern  farmer  in  his  business 

relations. 

San  Francisco:  N.  J.  Stone  company,  1899.     8°. 
'The  farmer  and  the  trusts,"  pp.  398-412. 

ADAMS,  Francis  Alexander.     Who  rules  America?    Facts 
and  figures  regarding  the  four  hundred  trusts 
that  prey  upon  our  people. 
New  York,  1899.     59  pp.     8°. 

ADAMS,   Henry  C.     Relation  of  the  state  to  industrial 

action. 

[Baltimore]:  American  economic  association.  Pub- 
lication, vol.  i,  no.  6. 

AMERICAN  ACADEMY  OF  POLITICAL  AND  SOCIAL  SCIENCE. 
Corporations  and  public  welfare.  Addresses  at 
the  fourth  annual  meeting,  Philadelphia,  April 
19—20,  1900. 

New  York:  Published  for  the  American  academy  of 
political  and  social  science.  McClure,  Phillips  & 
Co.,  i  poo.  208  pp.  8°. 

CONTENTS. 

Pt.  I.  The  control  of  public-service  corporations;  In- 
troductory:  The  possibilities  and  limitations  of  municipal 
control,  by  L.  S.  Rowe;  Financial  control,  capitalization, 
methods  of  accounting  and  taxation,  by  B.  S.  Coler 
Difficulties  of  control  as  illustrated  in  the  history  of  gas 
companies,  by  J.  H.  Gray;  Regulation  of  cost  and  qual- 

227 


228  THE  TRUST:    ITS  BOOK 

ity  of  service  as  illustrated  by  street-railway  companies, 
'by  F.  W.  Spiers. 

Pt.  II.  Influence  of  corporations  on  political  life,  by 
William  Lindsay. 

Pt.  III.  Combination  of  capital  as  a  factor  in  industrial 
progress;  Industrials  as  investments  for  small  capital,  by 
J.  B.  Dill;  The  evolution  of  mercantile  business,  by  John 
Wanamaker;  The  interest  of  labour  in  the  economics  of 
railroad  consolidation,  by  W.  H.  Baldwin. 

Pt.  IV.  The  future  of  protection;  The  industrial  ascen- 
dency of  the  United  States,  by  N.  W.  Aldrich ;  The  tariff 
policy  of  our  new  possessions,  by  R.  P.  Porter;  The 
next  step  in  tariff  reform,  by  C.  R.  Miller;  Report  of 
the  Academy  committee  on  meetings. 

AMERICAN  SOCIAL  SCIENCE  ASSOCIATION.     The   Chicago 

"trust"   conferences.     Being   a   report   by   the 

Committee  appointed  to  represent  the  association. 

In  American  social  science  association.     Journal  no.  37, 

December,  1899,  pp  245-256. 

APTHORP,  Henry.     "Trusts"  and  their  relation  to  indus- 
trial progress:  an  address  before  the  Economic 
League  of  Ashtabula,  Ohio. 
Akron,  Ohio:  The  Werner  company,  1899.     27 pp.  8° 

ASCHROTT,  P.  F.     Die  amerikanischen  Trusts  als  Weiter- 

bildung  der  Unternehmerverbande. 
Tubingen,  1889.     H.  Laupp.     (2) ,  36  pp.     8°. 

AUSTRIA.  Trusts  in  Austria.  Copy  of  bill  recently  intro- 
duced in  the  Reichstag  for  the  supervision  of 
trusts  controlling  the  price  of  sugar,  brandy,  beer, 
oil  from  minerals,  etc.,  June  14,  1897. 

In  United  States  Consular  reports,  vol.  55,  pp.  47-50. 
BAKER,   Charles  Whiting.     Monopolies  and  the  people. 

3rd  edition,  revised  and  enlarged. 
New  York  &  London:  G.  P.  Putnam's  Sons,  1899. 
xxiii,  (2),  368  pp.     12°. 

BEACH,  Charles  Fisk,  sr.     A  treatise  on  the  law  of  monopo- 
lies and  industrial  trusts  as  administered  in  Eng- 
land and  in  the  United  States  of  America. 
St.   Louis:  Central  Law  Journal  company,    1898. 
lxx,^2),76opp.     8°. 


APPENDIX  229 

BEACH,  Charles  Fisk,  jr.  Company  law.  Commentaries 
on  the  law  of  private  corporations,  whether  with 
or  without  capital  stock,  also  of  joint  stock  com- 
panies and  of  all  the  various  voluntary  unincor- 
porated associations  organized  for  pecuniary 
profit  or  mutual  benefit. 
Chicago:  T.  H.  Flood  &  company,  1891.  2  vols.  8°. 


The  problem  of  the  vanishing  profit.     An  address 

on  railway  and  commercial  trusts  and  combina- 
tions .    .    .   before  the  Congregational  club  of 
the  city  of  New  York,  January  igth,  1891. 
[New  York,  1891.}     16  pp.     12°. 

The  trust,  an  economic  evolution;  an  address   at 

the   Union     League    Club,  Chicago,  March   30, 
1894. 
New  York:     8°. 

BELL,  George  W.     The  new  crisis. 

Des  Moines,  Iowa:  Moses  Hull  &  company,  1887. 
x,  35i  PP-     I2°> 

BEMIS,  Edward  W.,  ed.  Municipal  monopolies:  A  collec- 
tion of  papers  by  American  economists  and 
specialists. 

New  York:  Thomas  Y .  Crowell  &  company.     [i8op.] 
ix,  (/) ,  691  pp.     Folded  sheets.     12°. 

BENEDICT,  Roswell  A.,  ed.  Settling  the  tariff -trust  ques- 
tion. A  debate.  Arguments  on  both  sides  fully 
reported,  with  plans  for  final  settlement  of  the 
question  and  its  removal  from  politics,  to  the 
advantage  of  American  industry  and  commerce. 
New  York:  1900.  vi,  (6),  117  pp.  12°. 

BLAND,  Thomas  A.     The  reign1  of  monopoly. 

Washington,   D.   C.:  Rufus  H.   Darby,   1881.    48 
DP.     8°. 


230  THB  TRUST:    ITS  BOOK 

BLISS,  William  D.  P.,  ed.     Encyclopedia  of  social  reform. 
New  York  and  London:  Funk  &  Wagnalls  company, 
1897.     viii,  1439  pp.     8°. 

Trusts,  pp.  1346-1348;  Monopolies,  pp.  888-894;  Standard 
oil  monopoly,  p.  1285;  Plutocracy,  pp.  1012-1016. 

BONHAM,  John  M.     A  brief  history  of  the  Standard  oil 
trust.     Its  method   and   its   influence,     [anon.] 
No  title-page.     [1888?]     23  pp.     8°. 

Industrial  liberty. 

New  York  and  London:  G.  P.  Putnam's  Sons,  1888. 
ix,  (i),  414  pp.     8°. 

"The  relations  of  the  railway  and  the  'trust'  to  industrial 
liberty,"  pp.  96-128. 

"The  influence  of  the  'trusts'  and  other  parasites  upon  in- 
dustrial liberty,"  pp.  129-158. 

Railway  secrecy  and  trusts. 

New  York  and  London:  G.  P.  Putnam's  Sons,  1890. 
138  pp.     12°.     (Questions  of  the  day,  no.  61.) 

BOUROFP,  Basil  A.  The  Impending  crisis.  Conditions 
resulting  from  the  concentration  of  wealth  in  the 
United  States. 

Midway    Press    Committee,     publishers.     Chicago. 
1900.     ix,  (/) ,  196  pp.     12°. 

BROUILHET,  Charles.     Essai  sur  les  ententes  commerciales 
et  les  transformations  qu'elles  pourraient  appor- 
ter  dans  1'ordre  economique  actuel. 
Paris:  Guillaumin  et  tie.,  1895.     (2),  211  pp.     8°. 

CALL,  Henry  L.     The  coming  revolution. 

Boston:  Arena    publishing    company,    1895.     (4), 
233  PP.     8°. 

CANADA.  House  of  Commons.  Report  of  the  select  com- 
mittee, appointed  apth  February,  1888,  to  in- 
vestigate and  report  upon  alleged  combinations 
in  manufactures,  trade,  and  insurance  in  Canada. 
Submitted  i6th  May,  1888. 


APPENDIX  231 

Ottawa:  Printed   by   Maclean,    Roger  &   company, 
1888.     xxv,  (/),  750  pp.     8°. 

Also  printed  as  Appendix  3  of  House  of  Commons  Journal 
1888. 

CARNEGIE,   Andrew.     The  gospel  of  wealth,  and  other 

timely  essays. 

New    York:  The    Century   Co.,    /poo.     xxii,    (2), 
305PP.     8°. 

"Popular  illusions  about  trusts,"  pp.  83-103. 
The  Empire  of  business. 

New  York:  Doubleday,  Page&Co.,  1902.  346pp.  8°. 
"The  bugaboo  of  trusts,"  pp.  153-170. 

CHICAGO   CONFERENCE  ON  TRUSTS.      Speeches,    debates, 
resolutions,  list    of    the    delegates,  etc.      Held 
September  i3th,  i4th,  isth,  i6th,  1890. 
Chicago:  The  Civic  Federation  of  Chicago,  1900.    x, 
626  pp.     Portraits  8°. 

CONTENTS. 

A  statement  of  the  trust  problem,  by  Henry  C.  Adams; 
How  to  judge  the  right  of  the  trusts  to  live,  by  J.  Dana 
Adams;  Address  of  welcome,  by  Edward  C.  Akin; 
Benefits  and  hardships  of  combinations,  by  G.  W.  Atkin- 
son; Trusts  an  early  incident,  but  no  longer  the  product 
of  present  prosperity,  by  Henry  D.  Baker;  Trust  evils 
and  suggested  remedies:  A  problem  for  a  generation  to 
settle,  by  Edward  W.  Bemis;  The  tariff  not  mother  of 
trusts,  but  mother  of  American  wealth  and  power,  by 
Henry  W.  Blair;  Trusts  a  natural  industrial  feature  and 
should  not  suffer  legislative  restraint,  by  Charles  J. 
Bonaparte;  Are  the  new  combinations  socially  danger- 
ous ?  by  John  Graham  Brooks ;  The  man  before  the  dol- 
lar: Society  not  enthralled  to  an  institution  solely  be- 
cause the  institution  exists:  The  remedy  of  Congressional 
license,  by  William  Jennings  Bryan;  Reply  to  Mr. 
Foulke,  by  William  Jennings  Bryan;  The  trust  as  a  con- 
spiracy against  civilization,  by  I.  D.  Chamberlain;  The 
necessity  of  restraining  monopolies  while  retaining 
trusts,  by  John  Bates  Clark;  Effect  produced  by  com- 
binations, whether  of  capital  or  labour,  upon  the  general 
prosperity  of  the  community,  by  W.  Bourke  Cockran; 
Reply  to  Mr.  Bryan  and  answers  to  various  questions, 
by  W.  Bourke  Cockran;  Committee  on  organization 


232  THE  TRUST:    ITS  BOOK 


and  program;  Committee  on  resolutions;  Neglect  of  the 
old  principle  of  "public  benefit"  in  recent  corporation 
laws,  by  John  B.  Conner;  Trusts:  their  abuses  and 
remedies,  by  Stephen  P.  Corliss;  Restraint  of  the  cor- 
poration, by  E.  C.  Crow;  The  Arkansas  anti-trust  law, 
by  Jefferson  Davis ;  Overcapitalization  and  concealment, 
by  James  B.  Dill;  Trusts  and  their  effects  upon  com- 
mercial travellers,  by  P.  E.  Dowe;  The  advantages  of 
rightful  combination,  by  James  W.  Ellsworth;  The 
economic  history  of  a  long  established  factor  in  Ameri- 
can transportation,  by  Stuyvesant  Fish;  A  plea  for 
moderate  action,  by  William  Fortune;  Desirability  of 
trusts,  by  Charles  Foster ;  Why  trusts  cannot  be  entirely 
overthrown,  by  William  Dudley  Foulke;  In  criticism  of 
certain  views  of  William  J.  Bryan,  by  William  Dudley 
Foulke;  Maryland  and  the  trusts,  by  George  R.  Gaither, 
jr.  An  iron  and  steel  worker's  view  of  combination,  by 
M.M-  Garland ;  The  control  of  trusts,  by  Samuel  Gompers ; 
Railroad  responsibility  for  objectionable  combinations; 
The  farmers  and  the  Chicago  grain  market,  by  S.  H. 
Greeley ;  The  trust  as  a  phenomenon  to  be  handled  fear- 
lessly and  utilized  for  the  public  weal,  by  Laurence  Gron- 
lund ;  The  public  and  the  trusts,  by  George  Gunton ;  Fed- 
eral control  by  explicit  and  comprehensive  statute,  by  F. 
E.  Haley ;  Foreign  markets  and  American  shipping:  Ex- 
tension of  competition  for  agricultural  relief,  by  J.  C. 
Hanley;  Causes,  dangers,  and  benefits  of  combinations, 
by  Azel  F.  Hatch;  The  social  enemy,  by  John  W.  Hayes; 
Introductory  address,  by  Franklin  H.  Head;  Tariff  the 
mother  of  trusts,  by  Byron  W,  Holt;  Formulation,  by 
permanent  chairman  of  the  conference,  of  certain  sug- 
gested methods  for  the  solution  of  the  trust  problem, 
William  Wirt  Howe ;  Fire  insurance  co-operative,  but 
not  a  trust:  Its  relation  to  the  community,  by  E.  C. 
Irwin;  Elements  of  the  trust  problem,  by  Jeremiah  W. 
Jenks;  Federal  and  State  regulation  of  trusts,  by  Aaron 
Jones ;  The  trust  as  a  labour-saving  machine  in  the  devel- 
opment of  a  large  programme,  by  Samuel  M.  Jones;  New 
Jersey  and  trusts,  by  Edward  Quinton  Keasbey;  Analy- 
sis of  industrial  statistics  collected  by  the  Civic  Federa- 
tion of  Chicago,  by  David  Kinley ;  Equality  of  rights  in 
transportation  agencies,  by  Martin  A.  Knapp;  Property 
rights  and  human  rights,  by  M.  L.  Lockwood;  The 
farmer:  The  man  who  can  declare  his  "Live  and  let 
live"  policy  at  the  ballot  box,  by  Cyrus  G.  Luce;  Com- 
binations in  the  main  beneficial,  by  Emerson  McMillin: 
Recognition  of  the  inevitable  and  adjustment  thereto, 
by  S.  A.  Martin;  The  trust  from  a  socialist  point  of  view 


APPENDIX  233 

by  Thomas  J.  Morgan;  No  monopoly  where  trade  and 
commerce  free,  by  J.  Sterling  Morton;  Railroad  co-opera- 
tion more  economic  than  unrestricted  competition,  by 
Paul  Morton;  Practical  remedies  for  industrial  trusts, 
by  G.  W.  Northrup,  jr.;  The  limitation  of  competition 
and  combination  as  illustrated  in  the  regulations  of  rail- 
roads, by  Joseph  Nimmo,  jr.;  Federal  taxation  as  a 
means  of  regulation,  by  Francis  G.  Newlands;  Where 
competition  is  present  discrimination  can  not  be  absent: 
An  argument  for  the  restoration  of  of  the  pooling  privi- 
lege with  Federal  supervision,  by  H.  T.  Newcomb;  The 
menace  of  monopoly,  by  Henry  W.  Peabody ;  The  effect 
of  trusts  on  our  national  life  and  citizenship,  by  Hazen 
S.  Pingree;  A  letter  to  Professor  George  Gun  ton,  by 
Hazen  S.  Pingree;  Where  single  taxers  stand:  The  lesson 
of  the  giant  with  his  feet  on  the  ground,  by  Louis  F. 
Post;  Consolidation  a  natural  growth  with  many  obvi- 
ously good  results,  by  W.  P.  Potter;  The  wrong  of  special 
privilege,  by  Lawson  Purdy;  Monopolies  under  patents 
and  the  industrial  effects  thereof,  by  James  H.  Ray- 
mond; How  consolidation  has  worked  out  in  the  case  of 
one  of  the  great  common  carriers,  by  Edward  P.  Ripley; 
The  antidote  of  free  trade  and  the  international  trust, 
by  Samuel  Adams  Robinson;  Historical  development 
of  the  corporation,  with  exclusion  of  the  principle  of 
public  benefit,  by  A.  E.  Rogers;  Legislative  discipline  to 
make  trusts  harmless,  by  Edward  Rose  water;  Combina- 
tions the  inevitable  incidents  of  industrial  evolution,  by 
David  Ross;  The  greatest  problem  since  slavery,  by  U. 
M.  Rose;  Trusts  and  free  trade,  by  John  F.  Scanlan; 
Competition  the  best  regulator,  by  Charles  A.  Schieren; 
Strength  of  the  trusts  in  props  of  special  privilege,  by 
George  A.  Schilling;  Corporate  ownership  of  railroads 
the  backbone  of  the  trust ;  protective  tariff  its  right  arm, 
by  J.  G.  Schonfarber;  Excessive  financial  energy,  by 
Horatio  W.  Seymour;  Explanation  of  the  new  trades 
combination  movement  in  England,  by  E.  J.  Smith; 
The  right  of  a  state  to  regulate  all  corporations  doing 
business  within  it,  by  T.  S.  Smith;  The  free  list  and  a 
graduated  corporation  tax  as  trust  remedies,  by  John 
W.  Spencer;  A  farmer  on  trusts;  Regulation  from  the 
protectionist's  standpoint,  by  John  M.  Stahl;  A  criti- 
cism of  the  Smithsonian  system  of  trades  combinations: 
Reform  without  an  economic  feature,  by  A.  W.  Still; 
The  economic  advantages  of  combination,  by  Clement 
Studebaker;  The  relation  of  an  unstable  currency  to  the 
formation  of  trusts,  by  H.  H.  Swain;  The  main  problem: 
How  shall  we  distinguish  among  corporations?  by 


234  THE  TRUST:    ITS    BOOK 

Robert  S.  Taylor;  The  bogey  monster:  A  thing  to  be 
regulated  and  encouraged,  by  F.  B.  Thurber;  The  atti- 
tude of  anarchism  toward  industrial  combinations,  by 
Benjamin  R.  Tucker;  The  legal  status  of  combinations 
of  labour,  by  William  H.  Tuttle;  Protection  and  trusts, 
by  Thomas  Updegraff;  Trusts  from  a  business  man's 
standpoint,  by  T.  B.  Walker;  Efficacy  of  economic 
checks  in  regulating  competitive  trusts,  by  James  R. 
Weaver;  The  combination  in  history,  ethics,  and  politi- 
cal economy:  Should  it  be  prevented  by  law?  by  A. 
Leo  Weil;  A  period  of  doubt  and  darkness  in  a  new  in- 
dustrial era,  by  Henry  White;  The  trust  as  a  logical 
development  impossible  to  extinguish  and  difficult  to 
regulate,  by  C.  D.  Willard;  Principles  and  sources  of 
the  trust  evil  as  Texas  sees  them,  by  Dudley  G.  Wooten ; 
The  trust:  An  institution  prouounced  by  the  United 
States  Supreme  Court,  in  1895,  beyond  Congressional 
control,  by  John  I.  Yellott. 

CHICAGO  TRUST  CONFERENCE.  Trusts  pro  and  con,  being 
a  detailed  report  of  the  Chicago  trust  conference 
held  in  Chicago,  September  13-16,  1899,  under 
the  auspices  of  the  Civic  Federation:  W.  Bourke 
Cockran  vs.  William  Jennings  Bryan. 
Chicago:  George  M.  Hill  co.,  [1899].  182  pp. 
Illustrations  (woodcuts') .  12°.  (Marguerite  ser- 
ies, no.  156.) 

CLARK,  John  Bates.     Capital  and  its  earnings. 

[Baltimore}:  American  Economic  Association.     Pub- 
lications, vol.  3.  no.  2.     [1888.] 


-  The  control  of  trusts.  An  argument  in  favour  of 
curbing  the  power  of  monopoly  by  a  natural 
method. 

New  York:  The  Macmillan  company,  IQOI.  x,  (2), 
88  pp.  12°. 

"The  only  control  of  trusts  that  the  public  can  supply,  he 
thinks,  is  by  insuring  opportunity  for  this  potential 
competition  to  become  actual  whenever  conditions  jus- 
tify it.  His  remedy,  then,  is  simply  the  application  of 
the  common  law  against  monopolies,  enforced  by  statute 
law  if  necessary. 


APPENDIX  235 

CLOUD,  D.  C.     Monopolies  and  the  people. 

Davenport,  Iowa:  Day,  Egbert  &  Fidlar,  1873.     (2), 
iv,  462  pp.     8°. 

Same.     3d  edition. 

Davenport,    Iowa:  Day,    Egbert    &   Fidlar,    1873. 
514,  Hi  pp.     8°. 

COLE,  Casca  St.  John.     Book  of  trusts. 

Minneapolis:  Traveling  Men's  Anti-Trust  League, 
1900.     64  pp.     24°. 

COLLIER,  William  Miller.     The  trusts.     What  can  we  do 

with  them  ?     What  can  they  do  for  us  ? 
New  York:    The  Baker  and  Taylor  company,  [/poo]. 

Vi,  (2),  338  pp.       12°. 

COOKE,  F.  H.     The  law  of  trade  and  labour  combinations 
as  applicable  to  boycotts,  strikes,  trade  conspira- 
cies, monopolies,  pools,  trusts. 
Chicago:  Callaghan  &  co.,  1898.     214  pp.     8°. 

COMMERCIAL  YEAR  BOOK,  THE.  A  statistical  annual  .  .  . 
Edited  by  Walter  A.  Dodsworth  .  .  .  Vol- 
ume V. 

New  York:  The  Journal  of  Commerce  and  Commer- 
cial Bulletin,  1900.     (6),  674  pp. 

"Industrial  consolidations  and  large  corporations  of  1899," 
pp.  560-564;  "Corporate  consolidations  of  forty  years," 
pp.  564-569- 

Vol.    VI.     [1901.]     Industrial  consolidations,     pp. 

487-491. 

"  Combines  and  trusts,"  532-533. 

COMMONS,  John  R.     The  distribution  of  wealth. 

New   York  and  London:  Macmillan  &  company, 
1893.     x,  258  pp.     12°. 

COOK,  William  Wilson.     The  corporation  problem.     The 
public  phases  of  corporations,  their  uses,  abuses, 
etc. 
New  York:  G.  P.  Putnam's  Sons,  1891.     vit_z62 

pp.       12°. 


236  THE  TRUST:    ITS  BOOK 

COOK,  William  Wilson.  "Trusts."  The  recent  combi- 
nations in  trade,  their  character,  legality,  and 
mode  of  organization,  and  the  rights,  duties  and 
liabilities  of  their  managers  and  certificate- 
holders.  2d  edition.  With  supplement. 
New  York:  L.  K.  Strouse  &  Co.,  1888.  (6),  113 
pp.  12°. 

COOKE,  Fredric  H.  The  law  of  trade  and  labour  combina- 
tions as  applicable  to  boycotts,  strikes,  trade 
conspiracies,  monopolies,  pools,  trusts,  and  kin- 
dred topics. 

Chicago:  Callaghan  and  company,  i8p8.     xxv,  (/), 
214  pp.     8°. 

COSSA,  M.     I  sindicati  industrial!  (trusts). 
Milan:  Hoepli,  igoi.     186  pp.     8°. 

CROZIER,  John  Beattie.     History  of  intellectual  develop- 
ment: on  the  lines  of  modern  evolution.     Vol.  3. 
Longmans,  Green,  and  co.,   New  York  and  Bombay, 
ipoi.     xiv,  (2),  355  pp.     8°. 

DILL,  James  B. ,  compiler.  General  corporation  act  of  New 
Jersey,  with  other  general  acts  relating  to  busi- 
ness corporations.  4th  ed. 

New    York:    Baker,    Voorhis    &    co.,    1001.     xiv, 
244  pp.     8°. 

The  statutory  and  case  law  applicable  to  private 

companies  under  the  general  corporation  act  of 
New  Jersey  and  corporation  precedents.     3d  ed. 
New    York:    Baker,    Voorhis    &    co.,    1901.     xxx, 
381  pp.     8°. 

DILLAYE,  Stephen  D.     Monopolies;  their  origin,  growth 

and  development. 

Washington,   D.   C.:  Rufus  H.   Darby,   1882.     95 
pp.     8°. 

DODD,  S.  C.  T.     Combinations;  their   uses   and   abuses. 

With  a  history  of  the  Standard  oil  trust. 
New  York  •  G.  F.  Nesbitt,  1804.     45  pp.     8°. 


APPENDIX  237 

Dos  PASSOS,  John  R.     Commercial  trusts.     The  growth 

and  rights  of  aggregated  capital.     An  argument 

before  the  Industrial  Commission,  December  12, 

1899;  corrected  and  revised. 

G.  P.  Putnam's  Sons,  New  York  &  London,  igoi. 

via,  (2),  ij7  pp.    12°. 

The   growth   and   rights   of   aggregated   capital. 

Argument  before  the  Industrial  Commission  at 
Washington,  D.  C.,  December  12,  1889. 
[New  York,  ipoif]  71  pp.     8°. 

DUCHAINE,  Paul.     La  question  des  trusts. 
Bruxelles:  Ad.  Mertens,  igoo.     8°. 

EDDY,  Arthur  J.     The  law  of  combinations,  embracing 
monopolies,  trusts,  and  combinations  of  labour 
and  capital;   conspiracy,   and  contracts  in   re- 
straint of  trade. 
Chicago:  Callaghan&  co.,  igoi.     2  vols.     8°. 

ELY,  Richard  T.     Monopolies  and  trusts. 

New  York:  The  Macmillan  company,  i goo.     xi,  (3) 
273  PP-     I2°-     (The  Citizen's  Library.) 

Problems  of  to-day;  a  discussion  of  protective 

tariffs,  taxation,  and  monopolies. 
New  York:  T.  Y.  Crowell  &  company,  1888.     222 
pp.     12°. 

Senior's  theory  of  monopoly. 

(In  American   Economic  Association.     Publications,    3d 
series,  vol.  i,  pp.  89-102.    New  York,  1900.) 

The  tariff  and  trusts. 

(In  Shaw,  Albert,  ed.:  The  national  revenues,  pp.  56-67. 
Chicago,  1888.) 

FARRER,  T.  H.     The  State  in  its  relation  to  trade. 

London:  Macmillan  company,  1883.     xi,   (i),  179 
pp.     12°.     (The  English  Citizen.) 

FLORA,  Frederico.     I  sindicati  industriali  (trusts). 
Torino:  Roux  et  Viarengo,  1900.     48pp.     8°. 


238  THE  TRUST:    ITS  BOOK 

GARELLI,  A.     Filosofia  del  monopolio. 

Milano:     U.  Hoepli,  1898.     268  pp.     8°. 

GENART,  Charles.     Les  syndicats  industriels. 

Paris:  L.    Larose,    i8g6.     232    pp.     12°.     (Ecole 
des  sciences  politiques  et  sociales  de  Louvain.) 

GETZ,  Paul.     Das  Branntweinrnonopol  als  Besteuerungs- 

form. 
Jena:  Gustav    Fischer,    1897.     (6),    81    pp.     8°. 

GIDDINGS,  Franklin  Henry.     Democracy  and  empire. 

New    York:    The   Macmillan   company,    1900.     x, 
363  PP.     8°. 

"The  trusts  and  the  public,"  pp.  135-164. 

New  York:  G.  P.  Scott  &  Co.,  1835.     40  pp.     8°. 

GOENS,  D.  van.     De  monopoliis. 

Trajecti:  ar  Rhenum,  1743.     59  pp.     8°. 

GREAT  BRITAIN.     Foreign  Office.     (1890).     Miscellaneous 
series    no.     174.     Report    on    the    constitution, 
attributes,  and  legal  status  of  "Trusts"  in  the 
United  States. 
London,  1890.     99  pp.     F°. 

(In  Great  Britain  Parliamentary  Sessional  papers,  1890, 
vol.  73.) 

GRIFFIN,  A.  P.  C.     A  list  of    books  relating  to  trusts. 
Washington:  Government  Printing  Office,  1902. 

GRINNELL,  William  Morton.  The  regeneration  of  the 
United  States.  A  forecast  of  its  industrial  evo- 
lution. 

G.  P.  Putnam's  Sons,  New  York  &  London,  1899. 
iv  (2) ,  145  pp.     12°.   (Questions  of  the  day,  no.  95.) 

GUNTON,   George.     Principles  of  social  economics  induc- 
tively considered  and  practically  applied  with 
criticisms  on  current  theories. 
G.  P.  Putnam's  Sons,  New  York,  London,   1891. 
xxiii,  447  pp.     8°. 
"Combinations  of  capital,"  pp.  397-414. 


APPENDIX  239 

GUNTON,  George.    Trusts  and  the  public. 

New  York:  D.  Appleton,  1900.     256  pp.     12° 

HADLEY,  Arthur  Twining.  Economics.  An  account  of 
the  relations  between  private  property  and  public 
welfare. 

G.  P.  Putnam's  Sons,  New  York,  London,  1899.     xi, 
(i),  496  pp.     8°. 

"Competition,"  pp.  64-96;  "Combinations  of  capital," 
pp.  151-179- 

Railroad  transportation:  its  history  and  its  laws. 

New  York  and  London:  G.  P.  Putnam's  Sons,  1885. 

v,  (i),26p  pp.     12°. 

"Competition  and  combination  in  theory  and  practice," 
pp.  63-99. 

HALLE,  Ernst  L.  von.     Trusts,  or  industrial  combinations 

and  coalitions  in  the  United  States. 
New  York:     Macmillan  &  co.,  1895.      xvi,  450  pp. 
2  folded  charts.     12°. 

Same. 

New  York:    The  Macmillan  company,  1899.     xvi, 
35°  PP-     2  folded  charts.     12°. 

HARDESTY,  Jesse.     The  mother  of  trusts.     Railroads  and 

their  relation  to  "the  man  with  the  plow. " 
Kansas    City,    Mo.:  Hudson-Kimberly    publishing 
company,  [1899}.     262  pp.     12°. 

Same.     Revised  edition. 

Kansas  City,  Mo.:  J.  Hardesty,  1900.     218  pp.     12° 

HARDING,  E.  E.  Aggressive  common  sense  concerning 
mutual  interests  and  relations  of  American  farm- 
ers and  wage-earners  vs.  private  monopoly  and 
trusts,  or  Rights  of  working  people  in  the  dawn  of 
the  twentieth  century. 
[Tracy,  Minn.:  E.E.Harding,  1901.]  106  pp.  12° 

HARPER,  William  Hudson,  editor.  "Restraint  of  trade." 
Pros  and  cons  of  trusts  in  facts  and  principles. 


240  THE  TRUST:  ITS  BOOK 

A  handbook  for  the  man  who  wants  to  think  clear 
and  vote  right. 

Printed  for  the  editor  by  the  Regan  printing  house, 
Chicago,  1900.     xvi,  368  pp.     8°. 

HARVEY,  W.  H.    Coin  on  money,  trusts,  and  imperialism. 
Coin  publishing  company,  Chicago,  [1899],     184  pp. 
Illustrations  (wood-cuts').     12°. 

HEWINS,  W.  A.  S.     English  trade  and  finance  chiefly  in  the 

seventeenth  century. 
Methuen  &  Co.,  London,  1892.     xxxv,  (i),  174  pp. 

12°. 

"The  monopolies,"  pp.  i-ir. 

"The  monopolies  and  modern  industrial  changes,"  pp. 
12-13- 

HISTORY  of  a  pool.     Reprinted  from  the  Iron  Age. 

New  York:  David  Williams  company  [1898],     109 

pp.       12°. 

HOBSON,  J.  A.     The  economics  of  distribution. 

New   York:  The  Macmillan  company,   1900.     vii, 
(3),  36i  PP-     12°. 

The  evolution  of  modern  capitalism.     A  study  of 

machine  production. 
London:  W.  Scott,  1894.     xiv,  388  pp.     12°. 

The  social  problem.     Life  and  work. 

London:  James  Nisbet  &  co.,  1901.      x,  (2),  295  pp. 
8°. 

"Public  and  private  industry,"  pp.  174-186. 

HOLT,  Byron  W.     Trusts  versus  wages. 

New  York,  1892.     19  pp.     8°.     (Tariff  Reform,  vol. 
5,  no.  17.) 

HOLT,  Henry.     Talks  on  civics. 

New  York:  The  Macmillan 'company,  1001.     xxvi, 
493  pp.     12°. 

Discusses  trusts,  municipal  ownership,  etc, 


APPENDIX  241 

HOPKINS,  L.  L.     The  coming  trust. 

New    York:  Advance    publishing    company,    ipoo. 
(4),  1 54  pp.     12°. 

HUDSON,  James  F.     The  railways  and  the  republic. 

New   York:  Harper  &  Brothers,   1886.     (4),  489 
pp.     8°. 

"Competition  v.  combination,"  pp.  207-315  - 

JEANS,  J.  Stephen.  Trusts,  pools  and  corners  as  affecting 
commerce  and  industry.  An  inquiry  into  the 
principles  and  recent  operations  of  combinations 
and  syndicates  to  limit  production  and  increase 
prices. 

London:  Methuen  &  co.,  1894.      v***»  I9°  PP-     I2°- 
(Social  questions  of  to-day.) 

JENKS,  Jeremiah  Whipple.     The  trust  problem.    New  and 

revised  edition. 

New  York:  McClure,  Phillips  &  co.,  1901.     xix, 
(j)>34J£/>-     Diagrams.     12°. 


Trusts  and  industrial  combinations. 

(In  United  States  Department  of  Labour,  Bulletin,  vol  5- 
no.  29,  pp.  661-831.    Washington,  1900.) 

JENNINGS,  Edwin  B.     Democracy  and  the  trusts. 

The  Abbey  press.  New  York,  London  [etc.]:  [1900], 
(2),  65  pp.     12°. 


People  and  property. 

The  Abbey  press,  New  York,  [1900].     109  pp.     12°. 

'KATZENSTEIN,    Louis.     Die    Trusts   in    den    Vereinigten 

Staaten.     Vortrag,  9  Januar,  1901. 
Berlin:  Leonhard  Simion,  1900.     Hi,  31  pp.     8°. 

KEASBEY,  Edward  Quinton.     New  Jersey  and  the  great 
corporations. 

(In  American  Bar  Association.     Reports  vol.  22,  pp.  379- 
413.    Philadelphia,  1899.) 


242  THE  TRUST:  ITS  BOOK 

KINLEY,  David  H.     Trusts. 

Chicago:  [1899],  66  pp.  Portraits.  8°.  (Pro- 
gress. Issued  monthly  by  the  University  Associa- 
tion in  the  interests  of  university  and  world's  con- 
gress extension,  vol.  5,  no.  j.) 

KLEINWAECHTER,  F.     Die  Kartelle:  ein  Beitrag  zur  Frage 

der  Organisation  der  Volkswirthschaft. 
Innsbruck,  1883.    8°. 

KUEHN,  E.     Das  Getreidemonopol  als  Sociale  Massregel. 
Leipzig:  F.  W.  Grunow,  1896.     123  pp.     12°. 

LANGSTROTH,  Charles  S.,  and  Wilson  STILZ.  Railway  co- 
operation; an  investigation  of  railway  traffic 
associations  and  a  discussion  of  the  degree  and 
form  of  co-operation  that  should  be  granted 
competing  lines  in  the  United  States.  With  an 
introduction  by  Martin  A.  Knapp. 
Philadelphia,  1899,  xv,  210  pp.  8°.  (University 
of  Pennsylvania  publications:  Political  economy 
and  public  law  series,  no.  15.) 

LB  ROSSIGNOL,  James   Edward.     Monopolies  past  and 

present.     An  introductory  study. 
New  York:  Thomas  Y.  Crowell  &  company,  [ipoi]. 
vii,  (i),  256  pp.     8°. 

[LEWIS,  B.  B.]    A  talk  about  "trusts."     A  short  and  in- 
formal talk  about  the  "  Trusts"  and  its  disastrous 
aspect  toward  the  present  economic  and  social 
status.  Submission  ?  or  sequestration  ?  Which  ? 
[Bridgeport,  Conn.,  1889.}     (16)  pp.     12°. 

LIEFMANN,  R.     Die  Unternehmerverbande. 

Frieburgi.     B.:  J.C.B.  Mohr,  1897.     199  pp.     8°. 
— — —  Die  Allianzen,  gemeinsame  monopolitische  Vere- 
inigungen   der  Unternehmer    und    Arbeiter  in 
England. 

Jahrbiicher  fur  Nationalokonomie  und  Statistik,  III. 
Folge,  vol.  20  (Oct.,  1900):  433-477. 


APPENDIX  243 

CONTENTS. 

I.  Kartelle  und  trusts  in  England. 
II.  Die  Entstehung  der  Allianzen. 

III.  Die  Organisation  und  Wirksamkeit  der  Allianzen. 

IV.  Die  bisherigen  Erfolge  der  Allianzen. 
Die  Weiterentwickelung  der  Allianzen. 

LLOYD,  Henry  Demarest.    Wealth  against  commonwealth. 
New  York:  Harper  &  Brothers,  1894.     iv,  563  pp. 
8°. 

LUSK,  Hugh  H.     Our  foes  at  home. 

New  York:  Doubleday  &  McClure  company,  i8pp. 
(6),  297  pp.     12°. 

LITTLETON,  Alfred.     The  law  of  trade  combinations. 

(In  Mackay,  Thomas,  ed.;  A  policy  of  free  exchange,  pp 
275-292.     New  York,  1894.     8°.) 

McLiN,  Robert  O.     The  trust  family. 

Published  by  the  author,  Kansas  City,  Mo.,  1899. 
168  pp.     16°. 

MACROSTY,  H.  W.     Trusts  and  the  state:  a  sketch  of  com- 
petition. 
London:  Richards,  ipoi.     318  pp.     8°. 

MANN,  E.  D.     The  trusts  and  the  people. 

New     York:  Town    Topics    publishing    company. 
8  pp.     8°. 

MARSHALL,  Alfred.     Principles  of  economics.     Vol.  i. 

London:    Macmillan  and  co.,  i8po.     xxviii,  754  pp. 
Diagrams.     8°. 

"The  theory  of  monopolies,"  pp.  456-472. 

MARTIN,  Edward  Winslow.  History  of  the  grange  move- 
ment; or,  the  farmer's  war  against  monopolies. 
Illustrated  with  60  engravings  and  portraits  of 
leading  grangers. 

National  publishing  company,   Philadelphia  [etc.], 
[1873}-     539  PP-     8°- 


244  THE  TRUST:    ITS  BOOK 

MASON,  Augustus  Lynch.     Trusts  and  public  welfare. 

Indianapolis:  The  Hollenbeck  press,  igoi.     42  pp. 
8°. 

MILLER,  J.  Bleecker.  Trade  organizations  in  politics,  also 
progress  and  robbery ;  an  answer  to  Henry  George. 
New  York:  The  Baker  &  Taylor  company,   1887. 
viii,  218  pp.     8°. 

MORGAN,  W.  Scott.     History  of  the  wheel  and  alliance, 

and  the  impending  revolution. 
Fort  Scott,  Kansas:  J.  H.  Rice  &  Sons,  1889.     774 
pp.     8°. 

"Monopoly  of  exchange;  of  transportation;  of  trade;  of 
land." 

MORRIS,  William.     Monopoly;  or  How  labor  is  robbed. 

London:  Hammerswith  Socialist  Soc'y.,  1893.     15 
pp.     12°. 

MULDOON,  William  H.  Mark  Hanna's  "moral  cranks" 
and  others.  A  study  of  ^to-day  ...  by 
"Mul." 

Brooklyn   (N.    Y.):  George  F.   Spinney  company, 
i poo.     vii,  (2) ,  ix-xvi,  316  pp.     Portrait.     12°. 
Part  3,  pp.  176-316:  "Workers  of  the  trusts." 

NATIONAL  anti-trust  conference,  held  Feb.   12-14,   1900, 

in  Chicago.     Official  report. 
Chicago:  ipoo.     586  pp.     12°. 

NETTLETON,  A.  B.,  ed.  Trusts  or  competition?  Both 
sides  of  the  great  question  in  business,  law,  and 
politics. 

Chicago:  Leon    publishing    company,     1000.     304 
pp.     8°. 

CONTENTS. 

The  argument  for  the  trusts,  to  further  favourable  view,  by 
Albert  Shaw;  The  argument  against  the  trust;  Trusts  in 
Europe;  The  college  and  the  trust;  Cornell  University, 
by  J.  W.  Jenks;  Yale  University,  by  A.  T.  Hadley; 
Columbia  University  by  J.  B.  Clark ;  University  of  Michi- 


APPENDIX  245 

gan,  by  H.  C.  Adams;  Williams  College,  by  C.  J.  Bullock; 
Institute  of  Social  Economics,  by  G.  Gunton;  Oberlin 
College,  by  J.  N.  Cawer;  Bureau  of  Economic  Research, 
by  E.  W.  Bemis;  University  of  Wisconsin,  by  R.  T.  Ely; 
The  Chicago  trust  conference;  Private  monopoly  inde- 
fensible, by  W.  J.  Bryan  .  .  .  The  question  of  remedies. 
The  courts  and  the  trusts;  The  Standard  oil  trust;  The 
law  and  the  trust ;  Trusts  under  the  Federal  Constitution, 
by  J.T.  Dye;  The  trust  in  politics  .  .  .  Anti-trust  legis- 
lation (in  the  States) ;  List  of  leading  American  trusts. 

NEW  YORK.  STATE.  Senate.  Majority  and  minority  re- 
ports of  the  committee  appointed  to  investigate 
the  cornering  of  grain  and  other  articles.  April 
20,  1883. 

Albany,    1883.     934.   pp.     8°.     (Documents   of  the 
Senate  of  New  York,  1883,  vol.  5.) 

Report  of  the  committee  on  general  laws 

on  the  investigation  relative  to  trusts.     Trans- 
mitted to  the  legislature,  March  6,  1888. 
[Albany]:  The  Troy  press  company,  printers,  1888. 
692  pp.     8°.     (Documents  of  the  Senate  of  New 
York,  1888,  vol.  5,  no.  50.) 


-  Assembly.     Fifth  annual  report  of  the  bureau  of 

statistics  of  labor  of  the  State  of  New  York  for  the 
year  1887.  Transmitted  to  the  legislature, 
April  2,  1888. 

[Albany]:  The  Troy  press  company,  printers,  1888. 
792  pp.  8°.  (Documents  of  the  Assembly  of  New 
York,  vol.  9,  no.  74.) 

Part  iv.  "Conspiracy  prosecutions  and  conspiracy  laws," 
PP-  563-700- 

-  Senate.     Report  of  the  committee  on  general  laws 

relative  to  combinations  commonly  known  as 
trusts.  Transmitted  to  the  legislature,  May  9, 
1889. 

Albany:  The  Troy  press  company,  printers,  1889. 
3°7  PP-  #°-  (Documents  of  the  Senate  of  New 
York,  1889,  vol.  10,  no.  64.) 


246  THE  TRUST:    ITS  BOOK 

NEW  YORK.  STATE.  Senate.  Report  and  proceedings 
of  the  Senate  and  Assembly  appointed  to  investi- 
gate trusts.  Transmitted  to  the  legislature, 
March  9,  1897. 

Albany  and  New  York:  Wynkoop,  Hallenbeek  Craw- 
ford co.,  State  printers,  1897.  1230  pp.  8°. 
(Documents  of  the  Senate  of  New  York,  1897, 
vols.  7,  no.  40.) 

NICHOLSON,  J.  Shield.     Principles  of  political  economy. 

New  York:  The  Macmillan  company,  1893-1901. 
3  vol.  8°. 

"  Of  monopoly  values, "  vol.  2,  pp.  59-67. 

"Trusts,"  vol.  3,  pp.  212,  215-216,  218,  220,  343,  367. 

NIMMO,  Joseph  Jr.     The  anti-trust  law  and  the  railroad 

problem. 

Washington:  R.  H.  Darby  printing  company,  1901. 
39  pp.  8°. 

NORMAN,  Lionel.  Legal  restraints  on  modern  industrial 
combinations  and  monopolies  in  the  United 
States. 

Nixon-Jones  printing  co.,  St.  Louis,  [1899].  16 
pp.  8°. 

O'CALLAGHAN,  Robert  E.     How  monopoly  can  be  pre- 
vented.    A  new,  simple,  and  practical  plan. 
New  York,  [1890].     16  pp.     12°. 

PARSONS,  Frank.     The  legal  aspects  of  monopoly. 

(In  Bemis,  Edward  "W.,  ed:  Municipal  monopolies,  pp. 
425-501.     New  York,  1899.) 

PATTEN,  Simon  N.     Principles  of  rational  taxation. 

Philadelphia,  1892.  25  pp.  8°.  (University  of 
Pennsylvania  publications:  Political  economy  and 
public  law  series,  no.  6.) 

PECKHAM,  S.  F.  Report  on  the  production,  technology, 
and  uses  of  petroleum  and  its  products. 

(In  United  States  Census  Office,  special  reports,  vol.  10. 
Washington,  1884.) 


APPENDIX  247 

PENNSYLVANIA.  Senate.  Document  No.  39.  Report  of 
the  committee  on  the  judiciary  (general)  of  the 
Senate  of  Pennsylvania  in  relation  to  the  coal 
difficulties,  with  the  accompanying  testimony. 
Read  March  24,  1871. 

(In  Pennaylvania  legislative  documents,   1871,  pp.  isrs-» 
1733.     Harrisburg,  1871.) 

POELMAN,   G.    A.~A.     De   jure   monopoliorum   Lugduni 

Batavorum,  1782. 
66  pp.     8°. 

POHLE,  L.     Die  Kartelle  der  gewerblichen  Unternehmer. 
Leipzig:  Frankenstein  &  Wagner,  i8p8.     (2),  150 
(i)  PP.     8°. 

REYNOLDS,  D.  A.     The  trust.     Capital  one  hundred  bil- 
lion.     1896-1906.     A  forecast  of  possibilities. 
F.  Tennyson  Neely,  London,  Chicago,  New  York, 
[jtfpp].     124  pp.     Portraits.     12°. 

ROGERS.  L.  H.     The  kite  trust:  a  romance  of  wealth. 

New  York:  Kite  Trust  publishing  company,  ipoo. 

vi,  475  PP-     12°. 
ROSE,  U.  M.     The  law  of  trusts  and  strikes. 

(/»  American  bar  association-     Report,  vol-Ii6,  pp.  287- 
321-     Philadelphia,  1893.) 

ROUSIERS,  Paul  de.     Les  industries  monopolisers  (trusts) 

aux  Etats-Unis. 
Paris:  Armand  Colin  et  cie.,  1898.     xvii,  (/),  339 

PP.      12°. 

Les  syndicats  industriels  de  producteurs  en  France 

et  a  l'6tranger  (Trusts,  Cartells,  Comptoirs). 
Paris:  Armand  Colin,  igoi.     12°. 

ROYALL,    William    L.     The    "pool"    and    the    "trust." 
Their  side  of  the  case.     Review  of  the  Supreme 
Court's  traffic  decision. 
George  M.  West,  publisher.     Richmond,  Va.,  1897. 

47  PP-     8°> 


248  THE  TRUST:    ITS  BOOK 

SCHALK,  Wilhelm  Cornells  Theodor  van  der.     Over  on- 

dernemers  vereenigingen. 
Leiden:  P.  Somervil,  i8pi.     8°. 

SEDGWICK,  T.  What  is  a  monopoly  ?  or,  Some  considera- 
tions upon  the  subject  of  corporations  and  cur- 
rency. 

SEEMANN,   E.   F.      Die  Monopolisierung  des  Petroleum 

Handels  und  der  Petroleum-Industrie. 
Berlin:  L.  Simion,  i8pj.     43  pp.     8°. 

SENIOR,  Nassau  William.     Political  economy.     6th  ed. 

London:  Charles  Griffin  and  company,  1872.     viii, 
231  pp.     12°.     (Encyclopaedia  Metropolitana.) 
"Monopolies,"  pp.  103-114. 

SHIBLEY,  George  H.     Momentous  issues. 

Published  by  the  Schulte  publishing  company,  Chicago , 
III.,  I  poo.     xiv,  230  pp.     8°. 

"Private  monopolies  and  trusts,"  pp.  39-109. 

— — —  The  monopoly  question.     Presented  to  the  Na- 
tional anti-trust  conference  Feb.  12,  13,  1900. 
New  York:  Bureau  of  economic  research,  /poo.  iv, 

56  pp.      12°. 

0 ]  The    trust   problem    solved.      A    non-partisan 

political  program  developed  by  the  combined 
efforts  of  many  minds. 

Published  by  the  non-partisan  voters'  union,    Wash- 
ington, D.  C.,  1901.     ip4  pp.     obi.  12°. 

SMILEY,  James  B.     To  what  are  trusts  leading? 

Chicago:  James  B.  Smiley,  [i8pp].     64  pp.     12°. 

SMITH,  Edward  J.     The  new  trades  combination  move- 
ment.    Its    principles,     methods,     and    progress. 

With  an  introduction  by  J.  Carter. 
Rivingtons:  London,  i8pp.     xxiv,  g6  pp.     12°. 


APPENDIX  249 

SPAHR,  Charles  B.    An  essay  on  the  present  distribution  of 

wealth  in  the  United  States.      2d  edition. 
New  York:  Thomas  Y.  Crowell  &  company,  1896. 
viii,  184  pp.     12°. 

SPELLING,  Thomas  Carl.  A  treatise  on  trusts  and  mo- 
nopolies, containing  an  exposition  of  the  rule  of 
public  policy  against  contracts  and  combinations 
in  restraint  of  trade,  and  a  review  of  cases,  ancient 
and  modern. 

Boston:  Little,  Brown,  and  company,  1893.     xxvii, 
(/),  274  pp.     8°. 

STICKNEY,  A.     State  control  of  trade  and  commerce  by 

national  or  State  authority. 
New    York:  Baker,    Voorhis    &    company,    1898. 

202  pp.      8°. 

STIMSON,  F.  J.     Handbook  to  the  labour  law  of  the  United 

States. 
New   York:  Charles  Scribner's  Sons,   1896.     xxii, 

385  pp.       12°. 

Trusts,  by  employees,  etc.,  pp.  178,  179,  185-193. 
Sherman  act  of  1887,  pp.  31,  204,  334~337,  344~347 

SWIFT,  Morrison  Isaac.     What  shall  be  done  with  trusts? 
[Boston:  Houghton,  Mifflin  &  co.,    1888.}      18  pp. 
8°. 

THURBER,  Francis  B.     The  right  to  combine. 

(In  American  Social  Science  Association,  Journal.     No.  37, 
December,  1899,  pp.  215-228.) 

TIEDEMAN,  Christopher  G.  A  treatise  on  state  and  federal 
control  of  persons  and  property  in  the  United 
States,  considered  from  both  a  civil  and  criminal 
standpoint. 

St.  Louis:  The  F.  H.  Thomas  law  book  co.,  1900. 
2  vols.     8°. 

TRUSTS.  The  question  of  trusts.  How  much  public  con- 
trol is  possible  and  necessary  ?  A  symposium : 


250  THE  TRUST:    ITS  BOOK 

Anti-trust  laws  a  failure.  J.  B.  Clark. — An  attack 
on  the  oil  combination.  H.  D.  Lloyd. — A  de- 
fence of  the  oil  combination.  S.  C.  T.  Dodd. — 
The  situation  and  the  remedy.  R.  T.  Ely. — 
Aggregation  of  capital  necessary.  Geo.  Gunton. 
— The  value  of  trusts.  Otis  Kendall  Stuart. — 
History  of  the  sugar  trust.  Geo.  J.  Manson. — 
The  socialist  view  of  trusts.  Daniel  De  Leon. 
Independent,  vol.  49  (Mar.  4,  1897) :  265. 

TRUST  Question.  The  i.  Its  development  in  America. 
C.  G.  Miller. — 2.  Evolution  of  the  combination. 
Everett  Leftwich. — 3.  The  suicidal  methods  of 
trusts.  H.  N.  Casson. — 4.  Co-operative  benefits 
through  taxation.  R.  Ward. 
Arena,  vol.  23  (Jan.,  1900) :  40. 

UNITED  STATES.  $oth  Congress,  ist  session.  House  re- 
port no.  3112.  Report  of  the  committee  on 
manufactures  on  the  investigation  of  trusts. 
July  30,  1888.  Hi,  (/),  956  pp.  8°. 

•  $oth  Congress,  2d  session.     House  report  no.  4147. 

Investigation  of  labour  troubles  in  Pennsylvania. 
Report  from  the  select  committee  on  existing 
labour  troubles  in  Pennsylvania.  Feb.  27,  1889. 
cxxvi,  783  pp.  8°. 

Includes  views  of  the  minority  of  the  committee. 

House  report  no.  4165.  Trusts.  Report 
from  the  committee  on  manufactures.  Mar.  2, 
1889.  ii,  188  pp.  8°. 

Submits  testimony  taken  "in  relation  to  the'whisky  trust 
and  the  combination  affecting  the  article  of  cotton 
bagging." 

House  report  no.  4165,  part  2.  Trusts. 
Views  of  the  minority  of  the  committee  on  manu- 
factures. Mar.  2,  1889.  37  pp.  8°. 

5 ist  Congress,  ist  session.     Senate  report  no.  829. 
Report  of  the  select  committee  on  the  transporta- 


APPENDIX  251 

tion  and  sale  of  meat  products.     May  i,  1890. 
40  pp.     8°. 
Bound  with  this  is: 

Testimony  taken  by  the  select  committee  of  the 
United  States  Senate  on  the  transportation  and 
sale  of  meat  products.  1889.  651  pp.  8°. 

UNITED  STATES.  $2d  Congress,  2d  session.  House  report 
no.  2278.  Alleged  coal  combination.  Report  of 
committee  on  interstate  and  foreign  commerce. 
Jan.  18,  1893.  viii,  (2),  261  pp.  8°. 

Testimony  taken  in  regard  to  the  alleged  combination  of 
the  Philadelphia  and  Reading  Railroad  company  and 
other  railroad  and  canal  companies  and  producers  of 
coal,  pp.  1-261. 

House  report  no.   2601.     Whisky  trust 

investigation.  Report  of  the  committee  on  the 
judiciary  on  the  character  and  operations  of  the 
Distilling  and  Cattle  Feeding  Company.  Mar.  i , 
1893.  x,  98  pp.  8°. 

Industrial   Commission.     Preliminary   report   on 

trusts  and  industrial  combinations,  together  with 
testimony,  review  of  evidence,  charts  showing 
effects  of  prices,  and  topical  digest. 
Washington:  Government  printing  office,  1900.  (2), 
264,  1325  pp.  8°.  (Vol.  i  of  the  Commission's 
reports.) 

Industrial  combinations  and  prices,  by  Jeremiah  W.  Jenks, 

PP-  39-57- 
Topical  digest  of  evidence  prepared  by  E.  Dana  Durand, 

pp.  59-264. 
Testimony  before  the  Commission,  part  n. 

Final  report. 


Washington:  Government  printing  office,  1902.  xi, 
(i),  1259  pp.  8°.  (Vol.  19  of  the  Commission's 
reports.) 

Pp.  595  to  722  contain  the  recommendations  of  the  Com- 
mission in  regard  to  industrial  combinations;  opinion  of 
F.  J.  Stimson,  advisory  counsel;  and  statement  of  E.  W. 
Huffcut.  on  constitutional  aspects  of  Federal  control  of 
corporations. 


252  THE  TRUST:    ITS  BOOK 

UNITED    STATES.     Industrial    Commission — Continued. 

Trusts  and  industrial  combinations.  Statutes 
and  decisions  of  federal,  state,  and  territorial 
law  [prepared  by  Jeremiah  W.  Jenks],  to- 
gether with  a  digest  of  corporation  laws  applic- 
able to  large  industrial  combinations  [prepared 
by  Frederick  J.  Stimson.] 

Washington:  Government  printing  office,  ipoo.     291 
pp.     8°.     (Vol.  2  of  the  Commission's  reports.) 

Report  on  transportation,  including  re- 
view of  evidence,  topical  digest  of  evidence,  and 
testimony  so  far  as  taken  May  i,  1900. 
Washington:  Government  printing  office,  1900.     832 
pp.     8°.     (Vol.  4.  of  the  Commission's  report.) 

This  report  and  those  following  contain  evidence  on  in" 
dustrial  combinations,  etc. 

Report  on  labour  legislation.     [Prepared 


by  Frederick  Jesup  Stimson,  Victor  H.  Olm- 
stead,  William  M.  Steuart,  Edward  Dana  Du- 
rand,  and  Eugene  Willison.] 

Washington:  Government  printing  office,  ipoo.  (2) , 
308  pp.  8°.  (Vol.  5  of  the  Commission's  re- 
ports.) 

Report  on  the  relations  and  conditions 


of  capital  and  labour  employed  in  manufactures 
and  general  business,  including  testimony  so  far 
as  taken  November  i,  1900,  and  digest  of  testi- 
mony. 

Washington:  Government  printing  office,  ipoi. 
224,  1071  pp.  8°.  (Vol.  7  of  the  Commission's 
reports.) 

Report  on  the  Chicago  labor  disputes  of 


1900,  with  especial  reference  to  the  disputes  in  the 
building  and  machinery  trades. 
Washington:  Government  printing  office,  ipoi.  clxv, 
612  pp.     8°.     (Vol.  8  of  the  Commission's  re- 
ports.) 


APPENDIX  253 

UNITED  STATES.     Industrial  Commission — Continued. 

Report  on  transportation  (second  volume  on  this 
subject),  including  testimony  taken  since  May  i, 
1900,  review  and  topical  digest  of  evidence,  and 
special  reports  on  railway  legislation  and  taxa- 
tion. 

Washington:  Government  printing  office,  ipoi.  ccciii, 
(j).  1152  pp.  Folded  sheets.  8°.  (Vol.  9  of 
the  Commission's  reports.) 


Report  on  the  relations  and  conditions 

of  capital  and  labour  employed  in  the  mining  in- 
dustry, including  testimony,  review  of  evidence, 
and  topical  digest. 

Washington:  Government  printing  office,  1001. 
clxxvii,   (/),  747  pp.     8°.     Vol.  12  of  the  Com- 
mission's reports) 

-  Report  on  trusts  and  industrial  combi- 
nations (second  volume  on  this  subject),  includ- 
ing testimony  taken  since  March  i,  1900,  together 
with  review  and  digest  thereof , and  special  reports 
on  prices  and  on  the  stocks  of  industrial  corpora- 
tions. 

Washington:  Government  printing  office,  1901. 
clxxiii,  (j),  1013  pp.     8°.     (Vol.  13  of  tlte  Com- 
mission's reports.) 

CONTENTS. 

Domestic  and  foreign  prices  of  American  products;  Costs 
and  prices  of  iron  and  steel  products;  Wholesale  and 
retail  prices;  Securities  of  industrial  combinations  and 
railroads;  Biblography  of  trusts  and  industrial  combina- 
tions. 


Report  on  the  condition  of  foreign  legisla- 
tion upon  matters  affecting  general  labour.  [Pre- 
pared by  Frederick  Jesup  Stimson.] 

Washington:  Government  printing  office,  ipor.  (4) , 
242  pp.  8°.  (Vol.  16  of  the  Commission's  re- 
ports) 


254  THE  TRUST:    ITS  BOOK 

UNITED  STATES.     Industrial  Commission — Continued. 

Report  on  industrial   combinations  in   Europe. 
[Prepared  by  Jeremiah  W.  Jenks.] 
Washington:  Government  printing  office,  1001.     Hi, 
343  PP-     ^°«     (Vol.  18  of  the  Commission's  re- 
forts) 

Part  I      Industrial  combinations  in  Europe. 
Part  II.     Foreign  legislation  regarding  corporations  and 
industrial  combinations. 

Interstate    Commerce    Commission.      Annual    re- 
port .  . 

Washington:  Government  printing  office,  1887-1900. 
14  vols.     8°. 

Special  consular  reports.  Vol.  XXI,  Part  III.  Trusts 

and  trade  combinations  in  Europe  .   .   .   Reports 
from  consuls  of  the  United  States  in  answer  to 
instructions  from  the  Department  of  State. 
Washington:  Government  printing  office,  ipoo.   (2) , 
413-559  PP-     8°. 

CONTENTS 

Austria;  Belgium;  France;  Germany;  Greece;  Italy;  Malta; 
Netherlands;  Norway;  Spain;  Sweden;  Switzerland 
United  Kingdom. 

VIGOUROUX,   L.     La  concentration  des  forces  ouvri^res 
dans  l'Am£rique  du   Nord.     Avec  une   preface 
de  P.  de  Rousiers. 
Paris:  A.  Colin  et  cie.,  1809.     xxvi,  362  pp.     12° 

VROOMAN,  Carl  S.     Taming  the  trusts. 

Topeka,    Kansas:  The    Advocate,    1900.     108    pp. 
Illustrations  (woodcuts).     12°. 

WALLACE,  H.     Trusts  and  how  to  deal  with  them. 

Des   Moines:  Wallace   publishing   company,    1800. 
165  pp.     sq.  16°. 

WALRAS,  L£on.     Etudes  d'6conomie  politique  applique'e. 
(Th6orie  de  la  production  de  la  richesse  sociale.) 
Paris:  F.  Pichon,  1808.     (2) ,  499  pp.     Plates.     8°. 
"Monopoles,"  pp.  193-233. 


APPENDIX  255 

WARNER,  John  De  Witt.     Tariff  trusts. 

New  York,  1892.     703-742  pp.     8°.     (Tariff  Re- 
form, vol.  5,  no.  8.     June  30,  1892.) 

Tariff  trusts  plead  guilty. 

New    York,    1892.     16   pp.     8°.     (Tariff  Reform, 
vol.  5,  no.  13.     September  15,  1892.) 

WEEKS,  Lyman  Horace.  The  other  side:  a  brief  account 
of  the  development  of  industrial  organizations  in 
the  United  States,  and  a  study  of  the  advantages 
that  capital,  labour,  and  the  consuming  public 
derive  from  them. 

National  publishing  company,  New  York.     [1900.] 
229  pp.     12°. 

WEISKIRCHNER,  R.     Das  Cartellwesen  vom  Standpunkte 

der  christlichen  Wirthschaftsauffassung. 
Wien:  Mayer  &  Co.,  1896.     15  pp.     8°. 

WILGUS,  Horace  L.  A  study  of  the  United  States  steel 
corporation  in  its  industrial  and  legal  aspects; 
being  three  lectures  delivered  to  the  class  in 
private  corporations  in  the  University  of  Michi- 
gan. June  3,  4,  and  5,  1901. 
Chicago:  Callaghan  &  co.,  1901.  xiii,  222  pp.  8°. 

WILSHIRE,  H.  Gaylord.     The  trust  problem. 

Terre   Haute:  Debs   publishing   company.     27   pp. 
12°. 

For  list  of  articles  in  periodicals,  see:  A  List  of  Books 
(with  reference  to  periodicals')  Relating  to  Trusts  by  A.  P.  C. 
Griffin,  2nd  ed.,  with  additions.  1002.  Washington:  Gov- 
ernment Printing  Office. 


DATE  DUE 


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